Bandhan Bank Q3 earnings impact: Stock snaps 6-day losing streak
Bandhan Bank stock gained nearly 3.5 per cent to snap six-session losing streak after its third-quarter results on Thursday. The stock had tanked nearly 20 per cent in the last six sessions after expensive merger with Gruh Finance.
Bandhan bank reported profits of Rs 331cr a growth of just 10.3% yoy as higher provisions related to Infra account dragged profits, however operating performance remained largely healthy. The bank made provision of Rs 384.95cr towards Infra related account (IL&FS) and has considered the account as NPA as of Q3. As of Q2FY19, bank exposure to this Infra account (IL&FS) was Rs 288cr and considering provisions made of about Rs 385cr this account stands fully provided. The Gross NPAs including the Infra account jumped to 2.4% in Q3 vs 1.3% in the last quarter. Mr. Chandra Shekhar Ghosh, MD & CEO of Bandhan Bank said Gross NPA ratio stands at 1.3% if we exclude the impact of Infra account (IL&FS) considered as NPA.
Operating profits at Rs 900cr saw strong growth of 56.8%, aided by healthy NII growth of 53.5% and Non-Interest income growth of 48.1%. Loan Strong Loan growth (on book+off book) of 46.1% to Rs 35,599cr and stable Net Interest Margins (NIMs) at 10.3% aided Net Interest Income. During the quarter the bank has written back treasury investment provision of Rs 95.5 cr on account of favorable yield curve movement in AFS and HFT portfolio. Deposits grew to Rs 34,639cr posting a strong growth of 36.9% yoy. Share of Retail deposits to total deposits now stands at 85%. The bank also posted strong CASA growth at ~71% yoy to Rs 14,342cr.