Mumbai: Private sector lender Bandhan Bank reported Friday its maiden quarterly loss of Rs 3,009 crore for the July-September period. The loss happened mainly due to higher provisioning for future loan losses in the microfinance book. Bandhan Bank had reported Rs 920 crore profit for the same quarter a year ago.
The Kolkata-headquartered lender started out as a microfinance institution. Bandhan Bank said it is setting aside provisions as a prudential measure. The company pointed out that the collection efficiencies are increasing, which may also result in some of the money being written back.
The loss would have been much wider but for a Rs 1,020 crore tax write-back as against a payment of Rs 312 crore in the year-ago period.
The overall provisions came at Rs 5,577 crore for the quarter under review, as against Rs 379 crore in the year-ago period and Rs 1,442 crore in the preceding June quarter.
CS Ghosh, MD and CE of Bandhan Bank said the bank decided to take the impact of the stress it sees as of now. He asserted that it will not see any elevated provisions later.
The money set aside included Rs 2,100 crore as standard asset provisions and Rs 1,500 crore as accelerated provision on NPAs (non-performing assets), and the overall provisions now will cover 98 per cent of the gross NPAs.
The GNPA ratio moved up to 10.82 per cent at the end of the quarter from 1.18 per cent in the year-ago period and 8.18 per cent, on the back of fresh slippages of Rs 2,950 crore at a gross level.
On the restructuring front, the bank is confident of managing its current set of accounts that have applied for the dispensation, Ghosh informed. He said over 14,000 accounts have already been upgraded over the last month and underlined that the NPAs should not be seen as losses due to default.
The bank has also decided to decrease the overall reliance on the microfinance book, which is resulting in the maximum NPAs, to 50 per cent by the end of the fiscal from the present 57 per cent, Ghosh said.
In order to achieve this, it will be concentrating more on the upcoming streams like loans to individual borrowers, who have grown from micro-lending, small business loans, gold loans and housing loans, he said.
For the reporting quarter, the core net interest income grew six per cent to Rs 2,430 crore on a seven per cent loan growth and the net interest margin was 7.60 per cent.
The other income came at Rs 491 crore from Rs 366 crore in the year-ago period and Rs 600 crore in the preceding quarter.