Bandhan Bank , one of India's fastest-growing private sector banks, has reported a 17% sequential increase in its profit after tax (PAT) for the first quarter. The bank's financial results, approved by its Board of Directors on July 18, reveal a PAT of ₹372.00 crore for the quarter ended June 30.

Key Financial Highlights

• Profit After Tax (PAT): ₹372.00 crore, up 17% from ₹318.00 crore in the previous quarter
• Deposits: Grew 16% year-on-year (YoY) to ₹1.55 lakh crore
• Gross Advances: Increased 6% YoY to ₹1.34 lakh crore
• Net Interest Income (NII): ₹2,757.00 crore, remaining flat compared to the previous quarter
• Net Interest Margin (NIM): 6.40% for the quarter

Improved Asset Quality and Secured Book Growth

One of the notable achievements for Bandhan Bank this quarter was the significant growth in its secured loan book. The bank reported that its secured book share grew from 43% to over 52% YoY, indicating a strategic shift towards more secure lending practices.

Deposit and Advance Growth

The bank's deposit base showed robust growth, increasing by 16% YoY to reach ₹1.55 lakh crore. Retail deposits, comprising CASA (Current Account Savings Account) and Retail Term Deposits, accounted for 68% of total deposits.

On the advances front, Bandhan Bank's gross advances grew by 6% YoY, reaching ₹1.34 lakh crore. The growth was primarily driven by the retail and wholesale banking segments:

• Retail book (excluding housing): 78% YoY growth
• Wholesale Banking: 32% YoY growth
• Housing book: 15% YoY growth

It's worth noting that the Emerging Entrepreneurs Business (EEB) book contracted by 15% during this period, aligning with the bank's strategy to diversify its loan portfolio.

Asset Quality

The bank's asset quality showed some pressure, with:

• Gross Non-Performing Assets (GNPA) ratio at 5.00% in Q1
• Net Non-Performing Assets (NNPA) ratio at 1.40% in Q1

However, the bank maintained a healthy Provision Coverage Ratio (PCR) of 73.70%, which increases to 87.30% when including write-offs.

Capital Adequacy

Bandhan Bank's capital position remains strong, with a Capital Adequacy Ratio of 19.40% as of June 30, well above the regulatory requirement of 11.50%.

Management Commentary

Partha Pratim Sengupta, MD & CEO of Bandhan Bank, commented on the results: "Bandhan Bank has delivered a sequentially improving performance in Q1, marked by strong growth in deposits and continued momentum in Retail & Wholesale banking. While the operating environment poses certain challenges, our performance reflects the underlying resilience of our business and the strength of our strategic direction."

Outlook

Despite the challenging operating environment, Bandhan Bank's Q1 results demonstrate its resilience and strategic focus on diversifying its loan book and improving asset quality. The significant growth in secured lending and retail deposits, coupled with expansion in retail and wholesale banking segments, indicates the bank's commitment to a more balanced and sustainable growth model.

As Bandhan Bank continues to navigate the evolving financial landscape, its focus on prudent risk management, operational efficiency, and long-term value creation for customers and stakeholders positions it well for future growth and stability in the Indian banking sector.

Bandhan Bank , a leading private sector lender, reported a mixed bag of results for the first quarter, with profit beating estimates but asset quality showing signs of stress. The bank's net profit stood at ₹370.00 crore for the quarter ended June 30, surpassing market expectations despite a significant year-on-year decline.

Key Financial Highlights

• Net Profit: ₹370.00 crore, down from ₹1,063.00 crore year-over-year, but slightly above the estimated ₹340.00 crore
• Revenue: Decreased to ₹5,470.00 crore from ₹5,536.00 crore in the same period last year
• Provisions: ₹1,146.00 crore, down from ₹1,260.00 crore quarter-on-quarter

Asset Quality Concerns

The bank's asset quality showed signs of deterioration:

• Gross Non-Performing Assets (GNPA) Ratio: Rose to 4.96% from 4.71% in the previous quarter
• Net Non-Performing Assets (NNPA) Ratio: Increased to 1.36% from 1.28% quarter-on-quarter

Business Segment Performance

Bandhan Bank's various business segments showed mixed performance:

Deposit and Advances

The bank's deposit base saw healthy growth:

• Total Deposits: ₹1.55 lakh crore, up 16% year-on-year
• CASA Ratio: Stood at 27.1%
• Retail Deposits: ₹63,661.00 crore, grew 34% year-on-year

On the advances front:

• Gross Advances: ₹1.34 lakh crore, up 6% year-on-year
• Secured Book: Grew at 29% year-on-year, increasing its share from 43% to above 52%

Management Commentary

Partha Pratim Sengupta, MD & CEO of Bandhan Bank, commented on the results: "Bandhan Bank has delivered a sequentially improving performance in Q1, marked by strong growth in deposits and continued momentum in Retail & Wholesale banking. While the operating environment poses certain challenges, our performance reflects the underlying resilience of our business and the strength of our strategic direction."

Outlook

Despite the year-on-year decline in profits, Bandhan Bank's better-than-expected bottom line suggests resilience in its business model. However, the rising NPAs indicate ongoing challenges in the operating environment, particularly in the bank's core microfinance segment.

The bank's focus on growing its secured book and diversifying its loan portfolio could help mitigate risks in the coming quarters. Investors and analysts will be closely watching the bank's asset quality trends and its ability to maintain growth momentum in its retail and wholesale banking segments.

Bandhan Bank's stock is likely to be in focus as the market digests these mixed results and assesses the bank's future growth prospects in light of the evolving economic conditions.