Bandhan Bank Q2 profit jumps 5.6 times as asset quality improves

Bandhan Bank posts its strongest profit in eight quarters as asset quality improves, provisions decline, net interest income grows and lending expands.

The Kolkata-headquartered private sector lender managed to reduce gross non-performing assets ratio to 3.11% at the end of September from 5.02% a year prior in tandem with the recovery in the unsecured loan market, which contributed about a third to its total portfolio.

"I would like to highlight that this is the best profit number in the last eight quarters, instead of the 5.6 times rise, which is a reflection of steady growth helped by a shift towards a more secular and diversified advance portfolio," managing director Partha Pratim Sengupta said after announcing the quarterly earnings.

The bank's pre-provision operating profit for the quarter stood 19% higher at Rs 1,556 crore over Rs 1,310 crore in the year-ago period. The provisions (other than tax) and contingencies charged to the profit and loss account for the quarter were at

Rs 718 crore compared with Rs 1,153 crore earlier.

Its net interest margin for the second quarter improved to 6.1% from 5.8% in the same period last year. Net interest income grew 14% at Rs 2,960 crore while total income rose 9.5% at Rs 3,458 crore.

The bank's gross advances stood at Rs 1.58 lakh crore at the end of September, growing 13% year-on-year while deposits rose 9% to Rs Rs 1.73 lakh crore.