Bandhan Bank suffers Rs 3,008 cr Q2 loss on higher stressed loan provisions

Lender had posted a net profit of Rs 920 crore in the second quarter ended September 2020

Private lender Bandhan Bank has suffered a loss of Rs 3,008.6 crore in the second quarter ended September 2021 (Q2FY22) on huge provisions of over Rs 4,600 crore for the bad loans and restructured advances.

It had posted a net profit of Rs 920 crore in the second quarter ended September 2020 (Q2FY22). Sequentially, its net profit was at Rs 373.1 crore in June 2021 quarter (Q1FY22).

The Kolkata-based lender said in a statement that it made an accelerated provision on NPA accounts of Rs 1,500 during the quarter, resulting in a Provision Coverage Ratio of 74 per cent in Q2FY22 as against 62 per cent in Q1FY22. In addition to this, lender has also provided additional standard assets provision amounting to Rs 2,100 crore and provision on restructured assets amounting to Rs 1,003 crore. The provisioning amounts to Rs 4,603 crore.

Chandra Shekhar Ghosh, Managing Director and chief executive, said the bank has recognised the stress pool and proactively taken additional requisite provisions such as to meet any contingency requirements and to look forward to do business on a clean slate. "This has resulted in loss for the quarter. However, it will help to concentrate on fresh business growth and achieving our long term goals." he said.

During the quarter, the bank made substantial recoveries in collections as the second Covid-19 wave subsided, he added.

Its gross non-performing assets rose to 10.8 per cent in September 2021 from 1.2 per cent a year ago and 8.2 per cent in June 2021. The net NPAs were up at 3.0 per cent from 0.36 per cent a year ago. However, they declined marginally from 3.29 per cent in June 2021.

Its net interest income (NII) for the quarter grew by just 0.6 per cent to Rs 1,935.4 crore from Rs 1,923.1 crore in Q2FY21. Sequentially, NII was down by 8.5 per cent from Rs 2,114.1 crore in Q1FY21.

The non-interest income grew by 34 per cent to Rs 491.6 crore in Q2FY22 from Rs 366.8 crore in the corresponding quarter of the previous year. Sequentially, it was down by 18.1 per cent from Rs 600.1crore in Q1FY22.

Its advances rose by 6.6 per cent to Rs 81,661.2 crore as on September 30, 2021 from Rs 76,614.6 crore as on September 30, 2020. The deposits increased by 23.9 per cent to Rs 81,898.3 crore at the end of September from Rs 66,127.7 crore a year ago.

Its capital adequacy ratio was sharply down to 20.4 per cent in September 2021 from 25.7 per cent a year ago and 24.8 per cent in June 2020.