GRUH finance boost helps Bandhan bank profits to surge

Equity Right Bandhan Bank

Bandhan Bank Q3FY20 Financial results

Bandhan Bank based out of West Bengal has announced its third-quarter results in the period starting September to December of the Financial Year 2020. The bank work as a micro-finance institution that is developed to reach out to the challenges that traditional financiers are facing. The bank works on bringing together the underprivileged community so they can be aware of the benefits of banking services that are affordable to them.

Q3FY20 Financial results

Bandhan Bank posted a Net profit of Rs 731 crore. In comparison, the bank posted a net profit of Rs 331 crore in the corresponding quarter of the previous financial year. However, the figures might be incomparable with the FY19 figures as it is in amalgamation with GRUH Finance Ltd.

Its Gross NPA for the December ended quarter stood at Rs 1,182 crore against the previous quarter which stood at Rs 1,064 crore. There is an overall increase of 1.93% in Gross NPA against the previous quarter of this financial year. The bank Gross NPA excluding one large Infrastructure Account is at 1.3% Net NPA of the Bank stood higher at 0.81% against the previous quarter number which stood at 0.56%. Net NPA for the bank as of Q3FY19 results stood at 0.7%.

Net Interest Income (NII) for the December ended period grew by 37.10 % to Rs 1540.3 crore. NII of the same period on the previous financial year stood at Rs 1,124 crore. While the non-interest income of the microfinance bank grew by 52.99% from Rs 234 crore as on Q3FY19 to Rs 358 crore in Q3FY20.

Net Interest Margin for the December ended quarter stood lower at 7.9 % against the corresponding quarter of the previous financial year at 10.5%.

 The bank keeps a provision at Rs 295 crore for the quarter ended December. This is higher than the previous quarter provisions which stood at Rs 145.5 crore.

 Bandhan bank kept additional provisions of Rs 200 crore on standard advances. The additional provisions were kept in the Microfinance Portfolio. The additional provisions were made after evaluating on certain risk it observed in different regions of northeast India. 

Capital Adequacy Ratio for Q3FY20 stood at 24.69%. Tier I is reported at 23.09% and CET1 stood at 23.09% and if include with profits for the current year it stood at 29.46%. The bank loan portfolio for the quarter ended December grew to 83.87% year on year (YoY) and CASA for the same period grew 31.36% YoY. CASA ratio excluding deposits from GRUH finance stood at 34.31% against CASA ratio of the previous quarter which stood at 32.90%.

Total consolidated income for the Bank stood at Rs 18.99 Billion. Consolidated operating profit for Q3FY20 stood at Rs 12.65 Billion. Consolidated PBT for the third quarter stood at Rs 9.71 Billion while PAT for the period stood at Rs 7.31 Billion.

Net Interest Margin (NIM) for the period stood at 7.91% while ROAA % stood at 3.52 % and ROAE at 20.0% The Bank also reports some disruption in business particularly in Assam. Daily collections in Assam are at around 93%. Bandhan Bank total MFI Book in Assam is 10% of the loans.

Total deposits in Bandhan Bank stood at Rs 54,908 crore. The bank report an increase of 58.51% as on December ended quarter as compared to Rs 34,639 crore recorded in Q3FY19. Total loans and advances given during the period stood at Rs 654.56 Billion.

Bandhan Bank also issues a statement that it is Making a plan for net 5 years to reach more areas with Micro, Housing and Rural lending. The Bank added 7.3 lakh customers during the Q3 quarter and its total customer base has now increased to 1.9 crore.

Bandhan Bank stock is currently trading at Rs 511.60 down by Rs 2.05 (0.40%) from the previous day closing price of Rs 513.65.

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