Bandhan Bank slips after NPAs widen in Q3

Bandhan Bank on Tuesday said it recorded 120% jump in net profit to Rs 731.03 crore in Q3 December 2019 over Q3 December 2018.

Net Interest Income (NII) grew 37.10% to Rs 1,541 crore during the period under review. The numbers cannot be compared as the Q3 results include figures of Gruh Finance, which merged with the bank on 17 October 2019.

The bank's gross non-performing assets (NPAs) stood at Rs 1181.96 crore as on 31 December 2019 as against Rs 1064.21 crore as on 30 September 2019 and Rs 831.02 crore as on 31 December 2018.

The ratio of gross NPAs to gross advances stood at 1.93% as on 31 December 2019 as against 1.76% as on 30 September 2019 and 2.41% as on 31 December 2018.

The ratio of net NPAs to net advances stood at 0.81% as on 31 December 2019 as against 0.56% as on 30 September 2019 and 0.7% as on 31 December 2018.

The bank's provisions and contingencies (excluding tax provisions) declined 22% to Rs 294.87 crore in Q3 December 2019 over Q3 December 2018. During the quarter, the bank made additional provision of Rs 200 crore on standard advances in microfinance portfolio after evaluating risk observed in certain areas of a north eastern state.

The bank's CASA ratio stood at 34.31% in Q3 December 2019 (excluding GRUH deposits 35%) as against 41.40% in Q3 December 2018.

Commenting on bank's Q3 performance, Chandra Shekhar Ghosh, managing director and CEO of Bandhan Bank said: "Q3FY20 has been a satisfying quarter given the challenges faced during the quarter. During the quarter, the Bank has made additional provision of ~ 200 crore on standard advances in microfinance portfolio after evaluating risk observed in certain areas of a north eastern state, though having a dwindling effect. Last quarter has witnessed strong customer growth on advances and deposit growth has been highest over last four quarter. I am positive and confident on the business and growth going forward."

Shares of Bandhan Bank turned volatile post result announcement. The stock was down 1.55% at Rs 505.70. It recovered after sliding as much as 2.85% to hit an intraday low of Rs 499.

Bandhan Bank is a commercial bank focused on serving underbanked and underpenetrated markets in India. The bank is the first instance in India of a microfinance entity transforming into a universal bank.

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