Never miss a great news story!
Get instant notifications from Economic Times
AllowNot now


You can switch off notifications anytime using browser settings.
12,078.55106.75
Stock Analysis, IPO, Mutual Funds, Bonds & More

Bandhan Bank to open more branches in search of deposits

A 36% higher net interest income helped the lender offset the impact of higher provisions on account of bad loans. Net interest margin remained higher at 10.45% for the first quarter.

, ET Bureau|
Jul 19, 2019, 05.18 PM IST
0Comments
Agencies
bandhan-bank-Agencies
Bandhan’s asset quality worsened year-on-year but improved sequentially. G
KOLKATA: Private sector Bandhan Bank has beat market expectation in reporting 46% jump in net profit at Rs 701 crore while it continued to explore newer pockets for deposit mobilization.

A 36% higher net interest income helped the lender offset the impact of higher provisions on account of bad loans. Net interest margin remained higher at 10.45% for the first quarter.

The net profit was higher than Bloomberg’s poll of Rs 623 crore. The bank had reported Rs 482 crore net profit in the year ago period.

"The year 2019-20 has started on a promising note with asset growth at 39.36%. The proposed merger with Gruh Finance will not only help diversify our portfolio, it will bring geographical balance in our business as well,” Managing Director Chandra Shekhar Ghosh said.

Bandhan’s asset quality worsened year-on-year but improved sequentially. Gross non-performing assets ratio was at 2.02% at the end of June, a sharp deterioration from 1.26% a year back. Gross NPA was 2.04% at the end of March.

It has made 57% higher provisions (other than taxes) at Rs 125 crore for the quarter, as compared with Rs Rs 80 crore in the year ago period. Net NPA ratio was at 0.56% lower than year ago’s 0.65% but higher than March quarter’s 0.58%.

Net interest income for the quarter under review grew 36% at Rs 1,410 crore, against Rs 1,037 crore in the same quarter last year. Other income rose 48% at Rs 312 crore from Rs 211 crore.

Ghosh said that the bank is looking to open 187 branches in by March 2020 subject to Reserve Bank of India’s clearance. It has opened 13 in the first quarter to take the count to 999.

“For new branches, we are looking at good deposit pockets,” Ghosh said.

Its deposits grew 42% to Rs 43701 crore but share of current and savings account (CASA) shrink to 36% in the first quarter compared with 40.75% in the preceding period.

Advances grew 39.4% to Rs 45420 crore.

After its merger with Gruh Finance, for which it is awaiting the National Company Law Tribunal’s go-ahead, the promoter shareholder would fall to 61% from 82.28%. The promoter Bandhan Financial Holdings is mandated by RBI to bring down stake to 40% eventually.

“We are working on plans. But it’s premature to discuss this at present,” the MD said.

Shares of Bandhan Bank slipped nearly 4% following the announcement of the financial results in line with the fall of the broader index but recovered in late trades to end merely 0.22% lower at Rs 527.50 on BSE. It has however closed 0.24% higher to Rs 530.05 on NSE.

Also Read

Deposit insurance in India covers 92% of accounts, 28% of banking deposits: RBI

Getting to the bottom of deposit insurance in India

Better-run banks will get bigger share of deposits

SBI cuts deposit, lending rates

Deposit cover should be doubled: SBI Report

Comments
Add Your Comments
Commenting feature is disabled in your country/region.
Download The Economic Times Business News App for the Latest News in Business, Sensex, Stock Market Updates & More.

Other useful Links


Copyright © 2019 Bennett, Coleman & Co. Ltd. All rights reserved. For reprint rights: Times Syndication Service