 "Bandhan Bank Q3FY25 results: Net profit drops 42% to Rs 426.5 crore")
Bandhan Bank on Friday reported a 41.8 per cent year-on-year (Y-o-Y) drop in net profit to Rs 426.5 crore in the October to December quarter (Q3FY25). In the year-ago period, net profit had stood at Rs 732.7 crore.
The lower profit was attributed to a change in the accounting policy for ESOPs, higher provisions due to stress in the microfinance portfolio, and the impact of technical write-offs during the quarter.
The net interest income (NII)—the difference between interest earned and interest expended—as of Q3FY25 stood at Rs 2,830 crore, compared to Rs 2,525 crore as of Q3FY24, representing a 12 per cent Y-o-Y growth.
Partha Pratim Sengupta, managing director and chief executive officer, Bandhan Bank, pointed out that while net profit fell, operating profit increased 22 per cent Y-o-Y. Operating profit was Rs 2,021 crore in Q3FY25.
The provisions (other than tax) and contingencies charged to the profit and loss account for Q3FY25 were at Rs 1,376 crore, compared to Rs 684 crore in Q3FY24.
Sengupta said the bank was currently executing the next phase of its Bandhan strategy.
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On the stress in the microfinance sector, Sengupta said, “While this sector is currently facing some challenges, we are also not insulated from it. We are also facing the heat. But we expect that after one quarter, it will show marked improvement, and our portfolio in this segment, especially on the slippages front, will be taken care of.”
The bank had implemented guardrails to arrest slippages, he said. These included caps on the quantum of loans and the number of loans, among others.
Sengupta, however, asserted that microfinance has been an asset and will continue to be one.
The share of Emerging Entrepreneurs Business (EEB), which includes microfinance, declined from 49.6 per cent in December 2023 to 42.5 per cent in December 2024.
Referring to the microfinance sector, he said the current downturn was cyclical.
Gross NPA in Q3FY25 stood at 4.7 per cent, compared to 7 per cent a year ago. Net NPA stood at 1.3 per cent in Q3FY25, compared to 2.2 per cent a year ago.
The bank’s net revenue was Rs 3,926 crore in Q3FY25, compared to Rs 3,071 crore a year ago.