Private sector lender Bandhan Bank on Friday announced its first quarterly loss of Rs 3,009 crore for the July-September period, mainly due to higher provisioning for future loan losses in the microfinance portfolio.
It had reported a profit of Rs 920 crore for the same quarter a year ago.
The Calcutta-headquartered lender, which started out as a microfinance institution, said it is planning provisions as a prudential measure and pointed out that collection efficiency is increasing, which may also lead to the recovery. part of the money.
The loss would have been much larger without a tax write-back of Rs 1,020 crore compared to a payment of Rs 312 crore in the previous year period.
Overall provisions amounted to Rs 5,577 crore for the quarter under review, compared to Rs 379 crore in the period last year and Rs 1,442 crore in the previous June quarter.
Its managing director and chief executive officer, CS Ghosh, said the bank has decided to take the impact of the stress it is currently perceiving and said it will not see any high provision later.
The money set aside included 2,100 crore rupees as standard asset provisions and 1,500 crore rupees as accelerated provision on NPAs (non-performing assets), and the overall provisions will now cover 98% of NPAs. rough.
The GNPA ratio rose to 10.82% at the end of the quarter, from 1.18% a year ago and 8.18%, due to further slippages from Rs 2,950 crore to a gross level.
The efficiency of collection at the global level has climbed to 94% and will reach the pre-COVID level of 98.5% by the end of the fiscal year, Ghosh said, adding that difficult segments and markets like Assam also recorded an improvement.
On the restructuring front, the bank is confident it will manage its current set of accounts that have requested the waiver.
Ghosh said more than 14,000 accounts had already been upgraded in the past month and stressed that NPAs should not be viewed as losses due to default.
The bank also decided to reduce the overall reliance on the microfinance portfolio, which translates into maximum NPAs, to 50% by year-end, from 57% currently, Ghosh said.
To achieve this, it will focus more on future flows such as loans to individual borrowers, which have shifted from microcredit, to small business loans, to gold loans and to home loans, he said.
For the current quarter, basic net interest income increased 6 percent to 2,430 crore rupees on loan growth of 7 percent and the net interest margin was 7.60 percent.
Other income was Rs 491 crore, compared to Rs 366 crore in the period last year and Rs 600 crore in the previous quarter.
Its capital adequacy levels have declined to 20.4% from 25.7% a year ago.
The bank certificate fell 2.36% to Rs 291.50 each on BSE, against a correction of 1.13% on the benchmark.