Bandhan Bank tanks

Bandhan Bank is among the top three losers on the BSE since the opening bell; the stock, which had closed on Friday at Rs.265.20, it went down to an intraday low at Rs.239.25, close to its 52-week low of Rs.229.65, which it had hit in Dec’21.

The market was disappointed with the Bank’s Q2FY23 performance. Sequentially, its net profit fell 76% to Rs.209 crore v/s net loss of Rs.3009 crore. Net Interest Income (NII) rose 13% to Rs.2193 crore.

Total advances rose 17% while deposits went up 21%.

The Bank actually reported a slight improvement in asset quality – Gross NPA was at 7.19% v/s 7.25% and Net NPA was at 1.86% v/s 1.92%.

More than doubled up (QoQ) contingencies at Rs.1280 crore and provision coverage ratio (PCR) of over 75%.  PCR is the percentage of funds that a bank sets aside for losses due to bad debts. A high PCR can be beneficial to banks to buffer themselves against losses if the NPAs start increasing faster spooked the market.

CASA (current account and savings account) grew 10.9% (YoY) while CASA ratio fell to 40.8% v/s 44.6% (YoY). CASA ratio of a bank is the ratio of deposits in current and saving accounts to total deposits. A higher CASA ratio indicates a lower cost of funds.

The Bank has 5646 outlets with 1,190 branches, and 4,456 banking units. The total number of ATMs stood at 432 and the number of employees at the bank went up to 64,078.