Bandhan Bank on Saturday reported an 80 per cent drop in net profit for the quarter ended March 2021 as elevated provisions to cover for non-performing assets ate into the lender’s bottomline.

Net profit during the January-March quarter was Rs 103 crore compared with Rs 517.3 crore in the corresponding quarter a year ago. Gross non-performing assets of the bank saw a sharp rise to 6.8 per cent of the advances against 1.5 per cent in the corresponding quarter of the previous year.

Total provisions other than taxes during the quarter stood at Rs 1,594.3 crore, a growth of 92.7 per cent over the year ago period. The bank said it is also carrying an additional provision of Rs 388 crore on standard advances in the micro banking portfolio.

The bank’s managing director and CEO Chandra Shekhar Ghosh said during the quarter, the bank had restructured accounts worth Rs 617 crore in the housing finance vertical.

Collection efficiency

The bank’s collection efficiency, including written off and NPA accounts, during the quarter improved to 95 per cent from 92 per cent at the end of the December quarter. But the second wave of the Covid pandemic has raised fresh concerns.

The bank anticipates a 3-5 per cent impact on the collection efficiency so far, but this is expected to improve over the next couple of months.

The bank also said that the share of top-up loans (additional financing provided by the bank to its borrowers) has come down from 4.8 per cent of the pan-India portfolio in the September quarter to 0.5 per cent for the March quarter.

“As the economy started opening up, and businesses started coming back, demand for top-ups naturally came down. As a policy we always believe in one loan and customers also prefer that. So, we don’t see a change in trend,” Sunil Samdani, CFO of Bandhan Bank, said, adding that such loans should not be seen as a way to avoid restructuring of dues.

The bank also said that in Bengal and Assam, where it has a major presence, the collection efficiency stood at 95 per cent and 83 per cent, respectively.

Loans and deposits

The bank’s total advances grew 21.2 per cent to Rs 87,042.9 crore as of March 2021 against Rs 71,846 crore as of March 2020. Total deposits increased 36.6 per cent to Rs 77,972.2 crore as of March 2021 compared with Rs 57,081.5 crore at the end of March 2020.

The board of directors has proposed a dividend of Rs 1 per share for the year ended March 31, 2021.

CSB profit surges

Kerala-based CSB Bank has reported a net profit of Rs 42.89 crore for the March 2021 quarter against a loss of Rs 59.68 crore in the year-ago period, largely helped by a write-back of standard asset provisioning and improvement in core income. Its core net interest income grew 75 per cent to Rs 275 crore.