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Bandhan Bank Q4 results: Net profit falls 80% to Rs 103 cr; operating profit rises 14%

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Bandhan Bank Q4 results: Net profit falls 80% to Rs 103 cr; operating profit rises 14%

KOLKATA: ‘s fourth quarter net profit fell to a fifth of what it was in the year ago period as the lender nearly doubled its provisions to cover asset quality risks.

Net profit was Rs 103 crore compared with Rs 517 crore last year. Interest rate reversal of Rs 538 crore during the quarter on account of recognition of non-performing assets has also contributed to the fall in net profit.

The lender’s net interest margin, a key profitability parameter, dipped 130 basis points to 6.8 per cent for the quarter under review as against 8.1 per cent in the year ago period.

Bandhan managing director Chandra Shekhar Ghosh exuded confidence that the impact of the second wave of the pandemic on businesses would be less than last year.

“We have learnt from experience. Our borrowers are better prepared this year to deal with the pandemic-led stress,” Ghosh said.

Its operating profit rose 13.7 per cent at Rs 1,730 crore against Rs 1,521 crore for the same period.

Total provision rose to Rs 1594 crore as against Rs 827 crore over the same period. The bank is also carrying additional provision of Rs 388 crore standard advances of microfinance loans within total provision.

The bank’s gross NPA jumped to 6.8 per cent at the end of March compared with 1.5 per cent a year ago. Net NPA ratio was 3.5 per cent against 0.6 per cent over the same period.

It wrote off loans worth Rs 1930 crore in the fourth quarter compared to merely Rs 200 crore in the year back. Out of which, Rs 1876 crore of loans were from microfinance books. Assam (Rs 771 crore) and West Bengal (Rs 670 crore) contributed mostly to the written off loan book.

“With accelerated provisioning and write off, we are now well placed as we enter FY22,” Ghosh said.

The lender restructured loans worth Rs 617 crore of home loans but it decided against restructuring microfinance loans.

Its loan portfolio including off balance sheet business grew 21.2 per cent year-on-year to Rs 87043 crore. It added five lakh customers during the quarter to take the tally to 2.30 crore.

The bank’s board has proposed a dividend of Rs 1 per share with face value Rs 10 for the year ended March 31, 2021.

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