Bandhan Bank, one of the private lenders in India, has reported a strong fourth quarter with a 68% increase in its net profit. For the fourth quarter ended on 31 March 2019, the bank’s net profit surged to Rs.650.87 crore as against Rs.387.85 crore in the same quarter of the previous year. Following the strong quarterly performance, the bank also announced an offer-for-sale (OFS) to comply with RBI’s promoter shareholding norms.
The bank posted strong growth in its non-interest income for the fourth quarter, and this is one of the main reasons for the significant increase in its net profit. For the fourth quarter of the fiscal year 2018-19, the bank’s non-interest income stood at Rs.388 crore, up 91% from Rs.203 crore in the same period of last year. Its net interest income for this period increased by 45.6% to Rs.1,258 crore from Rs.864 crore in the same period of the previous year.
The net interest margin of Bandhan Bank was 10.69% during the fourth quarter, compared to 9.32% in the same period of the prior year. For the full fiscal year, the bank reported a net profit of Rs.1,951.50 crore, up 45% from Rs.1,345.55 crore a year ago. Despite the increase in gross non-performing assets (NPAs), the bank’s net NPAs remained stable for this period at 0.58% of net advances.
Chandra Sekhar Ghosh, MD and CEO of Bandhan Bank, commented that the bank is taking steps to bring down the promoter stake to 40% in a bid to comply with the norms set forth by the Reserve Bank of India. He also noted that the bank has no plans to go for any further acquisitions.
RBI has imposed certain restrictions on the bank after it failed to bring down its promoter stake to 40%. Under these restrictions, the bank was not able to open any new branches until its promoter stake has been lowered to 40%. In January, the bank opted for a merger with Gruh Finance, which helped bring down the promoter stake to 61%.
Source: Hindu Business Line