Bandhan Bank on Friday reported a 66.2 per cent drop in net profit to Rs 290.6 crore during the third quarter of 2022-23 because of a decline in net interest income and fresh provisions for stressed assets. Net profit in the corresponding quarter previous year was Rs 859 crore.
Net interest income fell 2.1 per cent to Rs 2,080.4 crore from Rs 2,124.8 crore a year ago. “This is mainly because of higher reversal of interest rate of NPA accounts and increase in cost of funds,” Bandhan Bank CEO Chandra Shekhar Ghosh said.
Gross and net non-performing assets remained flat at 7.2 per cent and 1.9 per cent, respectively, compared with the second quarter. Total provisions (excluding taxes) during the quarter was Rs 1,541.5 crore, which is 91.3 per cent higher compared with Rs 805.7 crore a year ago.
Net interest margin
Net interest margin (NIM) slipped to 6.5 per cent during the quarter, down from 7 per cent in the second quarter and 7.8 per cent in the third quarter previous year. However, Ghosh is confident of a recovery.
“We have hiked interest rate nearly 2.5 per cent in the last few months. We have set up a separate team for current account mobilisation. Accordingly, CASA will improve and automatically the cost of funds will reduce. We expect lower interest reversal from next quarter onwards,” he said.
“With the initial trends and reports from the ground we are confident that from fourth quarter onwards, there would be an improvement in the performance. We have already seen SMA (special mention accounts) book coming down and improvement in DPD (days past due) across buckets which gives the confidence that the worst is over in terms of slippages,” he said.
