Banks like State Bank of India and Bandhan Bank are planning to move several of their back office verticals and processing centers in the sprawling fintech hub of Kolkata which is being built on 70 acre in New Town area.
As many as 28 financial institutions and legal firms have already taken land in the fintech hub, for which foundation stone was laid in 2012, one year after Mamata Banerjee came to power ending three decades of Left rule.
The government on Friday made the land booking and registration process online. About 48 acre of 70 acre has been allotted so far.
The government has also made rules easier for mutual funds to acquire land here.
Entities other than mutual funds, become eligible for a plot of land in the fintech hub if and only if they have annual revenue in excess of Rs 500 crore every year for three years.
Bandhan Bank has taken two plots in the hub and is planning to build its headquarter here as well as create a currency chest and back office, managing director Chandra Shekhar Ghosh said at the event to launch the online facility.
SBI chief general manager Ranjan Kumar Mishra said the bank is contemplating various of its verticals and processing centers here.
The hub, which is located at one of the most modern townships adjacent to Kolkata, is expected to be ready in three to four years time.
Historically, a home loan is considered the safest variety of credit because there is a security attached to it and most borrowers want to avoid losing their homes.
Demand and possession notices for apartments bought using home loans have been on the rise as delinquencies climb in the segment. Over the last few weeks, banks and non-banking financial companies (NBFCs) alike have sharply increased the volume of homes they repossess and put up for auction.
The notices have been put out by lenders across the public and private sectors, with institutions like IDBI Bank, Union Bank of India, Bandhan Bank, IIFL Home Finance, Tata Capital Housing Finance, Muthoot Housing Finance and Manappuram Home Finance, among others. The recovery amounts fall in the wide range of just under Rs 1 lakh and up to Rs 95 lakh.
“It is true that banks across the industry have become active about making recoveries. There are three processes they are employing – aggressive collections, resolution of the accounts wherever possible, and finally liquidation of whatever stock they have,” said a senior executive with a mid-sized private bank. The trend of recoveries through auctions are likely to continue into the third and fourth quarters of the current year, he added.
A similar trend of auction notices had been observed in the January-March quarter with respect to gold loans. Thereafter, most lenders with a sizeable gold loan portfolio reported a deterioration in asset quality in that segment. Bankers said that the notices work more as a wake-up call for the borrower than as an actual announcement of auctions.
Of course, there are stages to making recoveries through the auction route. The lender first issues a demand notice under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (Sarfaesi) Act, seeking repayment of outstanding dues within a stipulated period. If the demand is not met, it then puts out a possession notice and then finally a sale notice. All three kinds of notices now cover entire pages of newspapers.
Historically, a home loan is considered the safest variety of credit because there is a security attached to it and most borrowers want to avoid losing their homes. However, the second wave of the pandemic has dealt a huge blow to some borrowers, causing home loan slippages to rise.
Bankers said that the pain is severest in the self-employed category because their income streams have been affected due to repeated lockdowns and mobility restrictions. Unlike in the first half of FY21, there is no moratorium in the current year and that has caused higher delinquencies. State Bank of India’s (SBI’s) gross non performing asset (NPA) ratio in the home loan segment stood at 1.39% as on June 30, though it improved to 1.14% thereafter.
SBI chairman Dinesh Khara said after the bank’s Q1 results that almost 50% of the bank’s home loan book is to the non-salaried class. “Many of the SME borrowers also would be the ones to avail home loans. I think the essential stress seen in this book is on account of disruption in cash flows for the SMEs,” Khara said.
Analysts expect collection trends to improve in the days ahead. In a recent note, Emkay Global Financial Services said that banks expect some NPAs from the inflated special mention account (SMA) pool to spill over into Q2, while the restructured pool too should inch up. “Collection activity may return to the pre-Covid level in Q3, subject to no severe Covid third wave. Within retail, recovery rates should improve in secured mortgages and gold loans as stress formation in those segments was higher than expected due to impaired mobility, which has normalised now,” Emkay said.
Kolkata, Aug 23 (PTI) MFI-turned-bank Bandhan Bank will invest in improving digital capabilities as a part of Vision 2025, MD and CEO of the private lender Chandra Sekhar Ghosh said on Monday. Speaking at the sixth foundation day programme of the bank, Ghosh said the bank will also leverage machine learning and artificial intelligence.
“As a part of Vision 2025, Bandhan Bank will invest in digital capabilities. There is a need for digital transformation and improving the technology backbone,” he said.
With a present business size of Rs 1.50 lakh crore, Ghosh said the vision envisaged by the bank is having a well-diversified asset portfolio, optimum mix of secured and unsecured assets and geographically diversified.
Former chairman of State Bank of India and present head of Salesforce India, Arundhuti Bhattacharya, said there is a need for the bank to shift data on the cloud from its own premises and the regulatory system should encourage this migration. PTI dc NN NN
Microfinance loan repayment has risen sharply to about 90% on an average by the end of July from a low of 65-75% in May-June with economic recovery and the number of Covid-19 cases coming down. Industry captains expect business to be back to full swing not before the third quarter as the impact of the second wave is still being felt while the sectoral loan volume shrunk 14% in the April-June period.
“We are expecting recovery around the Durga Puja season. This is the time when business grows. But if the third wave comes, the recovery may be delayed by another quarter,” said Chandra Shekhar Ghosh, managing director at Bandhan Bank, the country’s largest microfinance lender. About 60% of Bandhan’s loan assets are unsecured micro loans.
The largest NBFC-MFI CreditAccess Grameen in terms of loan outstanding said its collection efficiency improved to 91% (excluding arrears payment) in July compared with 81% in June. The same parameter for Ujjivan Small Finance Bank improved to 93% in July from 78% in June. It was 79% as against 70% for Suryoday Small Finance Bank.
Bandhan Bank’s collection efficiency in micro loans was 77% in June.
All microfinance lenders have collectively disbursed Rs 25,820 crore in the June quarter, which was 14% lower than in the March quarter, according to data collated by Sa-Dhan, the oldest microfinance industry association.
Lenders across the board have raised their respective loan provisions in the June quarter to cover the possible future credit risk and took a hit on their profitability.
“We expect business — both in terms of loan disbursement and repayment – to be back to March level (pre-second wave level) by September,” Satin Creditcare Network chairman HP Singh said.
The sector’s gross loan outstanding fell 14% to Rs 2,14,528 crore from Rs 2,49,333 crore three months back.
“We have seen a recovery in microfinance operations since July,” said P Satish, executive director at Sa-Dhan.
A third wave, if it comes, can create further disruptions.
“Just about when we were coming out of the impact of Covid-19, the second wave struck. Though we had higher disbursement during the first quarter of the current fiscal compared to the same period of previous fiscal, business of the sector faced major challenges with full and partial lockdowns. Small MFIs bore the major brunt as access to funds from banks was restrained,” Satish said.
The provision for cumulative non-performing assets (NPA) by banks softened in the June 2021 quarter after a spike in the previous quarter when they resumed accounting for slippages after RBI’s schemes to defer the recognition of actual NPAs ended in December. For a sample of 28 banks, the loan loss or NPA provision fell by 6.8% year-on-year and 43.8% sequentially to Rs 36,805.4 crore in the June quarter.
The aggregate provision by the public sector (PSU) banks fell by 27% year-on-year due to a sharp double digit drop reported by State Bank of India, Punjab National Bank, Canara Bank, and Bank of Baroda. On the other hand, private sector banks reported 51% jump following a sharp increase reported by HDFC Bank, Kotak Bank, Bandhan Bank and RBL Bank. As a result, their share in the total NPAs increased to 42.5% from 26.1% in the year-ago quarter.
The total sample’s net interest income (NII) increased by 4.8% year-on-year to Rs 1.2 lakh crore. A majority of the banks, 20 to be precise, reported higher net interest from the year-ago level. The share of the private banks in the sample’s net interest expanded to 43.8% from 41.7% a year ago.
The sample’s cumulative COVID provisioning increased to Rs 34,641.5 crore in the June quarter from Rs 29,892.8 crore in the previous quarter. Here, the share of PSU banks increased to 34.7% from 26.7% sequentially.
June ’20
September ’20
December ’20
March ’21
June ’21
Loan loss provision (Rs crore)
39504.8
33896.1
28828.5
65542.2
36805.4
Loan loss provision (YoY % change)
-17.0
-11.0
-59.6
19.5
-6.8
Share of PSU banks in quarterly provisioning (%)
June ’20
September ’20
December ’20
March ’21
June ’21
PSU share (%)
73.9
77.5
63.7
66.4
57.5
Non-PSU share (%)
26.1
22.5
36.3
33.6
42.5
Data for a sample of 28 banks. Source: Bank data, ETIG
Dinesh Khara, Chairman, SBI said, “The RBI policy is pragmatic and strikes a fine balance between stance and strategy. While the policy stance continues to be accommodative to continuously support growth, a strategy of careful recalibration of liquidity management is clearly indicated with the roll out of VRRR.
Dinesh Khara
The policy has also nudged banks to shift to an alternate reference rate with the discontinuation of LIBOR. The extension of the on-tap TLTRO scheme and the deferral of the deadline for meeting the operational parameters for stressed entities will help corporates navigate through the pandemic with a degree of certainty.”
Rajni Thakur, Chief Economist, RBL Bank said, “MPC announcements were pretty much on expected lines with key rates held constant and upward revision of inflation forecasts for the current fiscal year.
Policy bias in favour of nurturing growth continues and there was a strong denial of any urgency to scale back monetary support on account of higher inflation or potential global normalisation.
While enhanced VRRR quantum and one voice of dissent can be seen by market as mildly dovish, in all likelihood, RBI has kept its options open to support growth should the third wave disrupt nascent momentum or to use monetary tools to begin normalisation if growth -inflation dynamics start to get complicated.”
Rajni Thakur
On similar lines, Siddhartha Sanyal, Chief Economist and Head – Research, Bandhan Bank said, “While the status quo on rates with a 6-0 voting and continued “accommodative” stance were on expected lines, the split voting as regards the policy stance was a modest surprise. Still, the overall tone of policy continued to focus clearly on supporting growth recovery.”
“Given higher global commodity prices, sticky food inflation and rise in domestic fuel prices, inflation may stay higher than for the RBI’s comfort. However, with the tentative and uneven nature of recovery, one expects the MPC to continue prioritizing supporting growth in the coming months.”
Sidharth Sanyal
Indranil Pan, Chief Economist – YES BANKsaid, “RBI has attempted and managed to balance the contradicting objectives of managing inflation expectations while also communicating the need for sustained policy accommodation.
Even as the inflation forecasts for the current FY have been raised, the communication continues to be that the hump in inflation is supply-led and thus ‘transitory’ wherein the demand side push for inflation is almost absent. This is the reason for RBI to have been able to see-through the current high inflation levels.
RBI continues to highlight that any pre-emptive tightening can kill the nascent and hesitant recovery that is taking shape. In cognizance with an extremely uncertain growth climate, we think that the RBI will maintain its accommodative policy and not move on any form of tightening – be it on the rates side or on the liquidity side – till the end of the current FY.”
Yes Bank
While A. K. Das, Managing Director & CEO, Bank of Indiahas a positive outlook. He said, “Continued accommodative stance of RBI is expected to catalyze growth in real segments in a strong, broad based and sustained manner”.
The second Covid-19 wave has impacted the recovery and lending activities of commercial banks. From tackling scattered lockdowns to managing recovery and collections, banks are expecting a recovery phase in the coming quarters.
Private lender Federal Bank recorded the highest ever operating profit of Rs.1135 Cr with 22% Y-o-Y growth in Q1FY22. The total business of the bank reached Rs. 299158.36 Cr registering Y-o-Y growth of 8.30% as of 30th June 2021.
Shyam Srinivasan, Managing Director, and CEO, Federal Bank said in a statement, “The external environment continues to be challenging however we have managed to keep our operating momentum intact by delivering our highest ever operating profit, for the quarter. Our CASA ratio is at an all-time high and we continue to build a granular liability franchise with more than 90% of our deposits being retail in nature. Our relationship with the NR diaspora continues to blossom with our share in personal inward remittances increasing to 18.20%. We have also managed to keep asset quality in check with only a marginal uptick in GNPA and NNPA.”
Shyam Srinivasan (File Pic)
On similar lines, IDFC FIRST Bank in its Q1FY22 financial results announced the highest ever core pre-provisioning operating profit at Rs. 601 Crore. Total Income grew by 36% YoY basis to reach Rs. 3,034 crore in Q1FY22.
V Vaidyanathan, Managing Director, and CEO, IDFC FIRST Bank, said in a statement, “Our CASA ratio is high at 50.86% despite reducing savings account interest rates by 200 bps recently. Because of our low-cost CASA, we can now participate in prime home loans business, which is a large business opportunity.”
“Regarding the loss during the quarter, we have made prudent provisions for COVID second wave, and expect provisions to reduce for the rest of the three quarters in FY 22. We guide for achieving pre- COVID level Gross and Net NPA, with targeted credit loss of only 2% on our retail book by Q4 FY 22 and onwards, assuming no further lockdowns.” Vaidyanathan added. South-based lender CSB Bank in its First Quarter results announced a profit after tax at Rs 61 Cr in Q1FY22 as against Rs 53.56 Cr in Q1FY21 and Rs 42.89 Cr for the sequential quarter. Net profit increased by 14% YoY. The operating profit of the bank is Rs 179.78 Cr with a Y-o-Y -growth of 39%.
CVR Rajendran, Managing Director & CEO at CSB Bank said in a statement, “COVID second wave coupled with the LTV management of gold loans did pose some challenges in the first quarter of FY 22. Lockdowns, alternate holidays, slowing down of economic activity, controlled movements due to strict social distancing norms, lack of transport, etc restricted the customer access to branches which in turn impacted both the fresh pledges and releases. Thankfully, the worst seems to be over now and recoveries are happening in full swing. The portfolio LTV that was at 83% has been brought down to 75%. The aggressive vaccination push and controlled localised lockdowns have helped in managing the second wave to a great extent and we are optimistic to catch up the business opportunities on a larger scale from this quarter. Bandhan Bankalso announced its Q1FY22 results with pre-provision Operating Profit (PPOP) at 9.3%; up from 8.6% in the Q4FY21.
Chandra Shekhar Ghosh, Managing Director, and CEO of Bandhan Bank said in a statement, “Despite the challenging environment due to covid second wave, we have delivered the best-ever quarter in terms of operational performances. Collections continue to improve with covid restrictions getting relaxed. Typically, the second half of the financial year is always better for the bank in terms of growth and collections. With the easing of the covid second wave and upcoming festive season, we are confident of achieving better performance going forward.” While Axis Bankreported a 94 percent year-on-year rise in standalone net profit at Rs 2,160 crore as against Rs 1,112 crore reported in the same quarter of last year (Q1FY21).
Amitabh Chaudhry, MD & CEO, Axis Bank said, “Despite second wave headwinds, we made tremendous progress this quarter on our strategy of building a high-quality granular franchise, increasing our relevance in the lives of the customers and the communities we serve, and building the best digital bank in the country,”
“The journey we started two years back is gathering momentum with a strong balance sheet, conservative provisions, and a steady operating performance supporting our aspirations. We have also set a bold mandate for our long-term ESG goals. We continue to monitor the macroeconomic environment closely and we remain confident about our strategy and the road ahead,” Chaudhry said.
Amitabh Chaudhry (File Pic)
The country’s largest lender, The State Bank of India recorded its highest-ever quarterly profit at Rs 6,504 cr. in Q1FY21. This implied a 55-per cent year-on-year (YoY) rise in net profit compared to Rs 4,189.34 crore in the year-ago period. Dinesh Khara, chairman of SBI said, “Around 50% of our home loan book is to non-salaried customers which belong to the SME segment,” “The slippages are largely because of the disruption in the SME segment.” He also said, “SBI is expecting a credit growth of 9% during this financial year. The under-utilization of credit lines by borrowers in our corporate clients group has dropped to 25%,” Khara said. “That’s a positive,” he added.
SBI says that the bank is gearing up on several fronts to mitigate all the challenges posed by the spread of the COVID-19 pandemic.
We are provisioning for net NPA in this quarter also. It has come down and so a very small amount has come. This is a conscious call because we have not written off NPAs in this quarter, says CS Ghosh, MD & CEO, Bandhan Bank.
It has been a kind of mixed performance for Bandhan Bank. While the bank has reported the highest ever quarterly operating profits, NPA stress has also risen. Can you tell us about the quarter? This quarter was more severe than any other quarter in the pandemic situation. The second wave affected lots of lives and people were more scared about it. That prevented a good number of business owners from properly running their business. It started in the first month of the quarter from central India, Delhi and Madhya Pradesh and Chhattisgarh and it has gradually gone to the north east. Till now, it is happening in the north east.
Secondly, micro credit is nearly 60% of Bandhan Bank’s advanced book. The staff go to customers’ doorsteps to collect instalments. It was not easy to do because of the lockdowns and also because of risk to staff health. The number of cases affected came down in July and lockdowns were also lifted and a couple of rating organisations and the government also declared their GDP growth rate will come to 9-10%. I hope the future turns very good.
The total collection efficiency stood at 86% in Q1. Talk to us about collection efficiency for the overall book and collection efficiency in states like West Bengal and Assam. Are you seeing any improvement versus the last quarter? There has been improvement in collection efficiency. In March, micro credit collection efficiency was 95%. In April, May, June it was hit in a big way by the Second Covid Wave. For that region, it has come down a little bit.
In case of the micro credit portfolio, in the first quarter our demand was Rs 13,000 crore and we collected nearly Rs 13,000 crore including arrears. That means our customers are paying the instalment. The total collection efficiency including arrear is 98% in micro credit and in case of total bank, it is 101% which shows that after the bad situation in the first quarter, it recovered a lot in this month. I hope next quarter onwards it will improve further.
Has micro finance loan book slowed versus last quarter? Is that a conscious call to slow down the growth as collections and demand may be impacted? No. There are three factors here; one factor is that in the first quarter of any financial year, demand for credit always comes down. Secondly, there was the impact of Covid 2.0 in first quarter and that also impacted demand. Thirdly, we are disbursing credit conservatively and on a very selected basis.
Credit cost has come down versus the last quarter but it is still pretty high at 4.9. Will operating profits be enough to take care of the provisioning or the credit cost needs? The provisioning is in two parts. One, it has helped me to increase PCR. The other side, it has helped us to strengthen our balance sheet. We can continue this provision continuously and accordingly the business growth will absorb it.
Gross NPAs stood at 8.2% and the net at 3.3%. At a net-net level, will gross and net NPA for FY22 be higher? No. We have not written off this quarter. We have a Rs 700 crore account for NPA. If we write off this NPA, it will not be in place. Again, when one calculates the gross NPA percentage, because my advance book size has come down, percentage wise also, it has come down. Otherwise, percentage wise gross NPA has increased by 0.5% from last quarter to this quarter. We are tracking that. We are provisioning for net NPA in this quarter also. It has come down and so a very small amount has come. This is a conscious call because we have not written off NPAs in this quarter.
Overall the loan book has declined by about 8% quarter-on-quarter. What kind of loan growth do you expect this year? In this type of a situation, the bank will be cautious and very selective. The credit growth will come from the last month of the second quarter before the Puja and Dussehra to the fourth quarter. That has been the case in normal times and even last year. So it depends on whether the Third Covid Wave comes in the Puja season or not.
Over the next one-two years, which segments do you think will lead to growth — microfinance, mortgage or commercial banking? Microfinance is a very standard model and India is a big country. There is no growth driver needed for that. But we are likely to drive the growth of the housing loan vertical. It accounts for 24% now and in future we would like this segment to account for 30% of the total book. The second vertical we are focussing on is MSME which caters to less than Rs 5 crore type of MSME. There is a huge market which is secure and we would like to grow it in future. Gold loan is another we would like to grow because like housing loans, it is also secured. These are the three sectors we would like to focus on in future and which we expect to account for 30:30:30 by 2025.
What led to margin improvement during the quarter, at what level do you see margins stabilising going ahead? I have always predicted that around 8 or 8 plus will be NIM but this quarter, it is a little bit higher compared to the last quarter. That is because of last quarter we have reversed the interest of Rs 500 crore. Otherwise, 8 to 8.4 is what we would like to maintain.
You seem to have sufficient capital, how long will the current capital last considering your growth? The growth of the bank was a little bit on conservative side last year and this year we expect normal growth. Upto 2025, we do not need the extra capital.
Is the structure of the financial industry changing with competition from fintech players? The banks are focussing on digital transaction mode for the customers. At Bandhan Bank, in the last quarter, 87% of the transactions happened digitally. 11% of the bank accounts were opened digitally. We are also invested in digital transformation of the bank. We are also focussing on how we can give digital service to the customer.
Won’t you need additional capital to expand in digital space? We have enough funds and we are already working on that from last year. Whatever is needed, will be invested from our own funds.
A third wave of Covid-19 would be a challenge for microfinance customers and would defer some of their loan demands, according to Chandra Shekhar Ghosh, managing director and CEO of Bandhan Bank. Ghosh tells Mithun Dasgupta that during the first quarter of this fiscal, the bank’s average loan size for microfinance customers declined compared to same period last fiscal.Edited excerpts.
During the first quarter this fiscal, Bandhan Bank’s Emerging Entrepreneurs Business (EEB, erstwhile microbanking segment) portfolio grew 12% year-on-year. Going forward, what is the loan growth scenario in this segment? During the first Covid-19 wave in the last financial year, [there was business growth] in the fourth quarter … around 20% year-on-year. In this financial year, though the second wave was more severe than the first, we have [seen] this kind of growth during the first quarter. If [there is no third wave] in the current quarter, loan growth will not be very different from that of last year. If the third wave comes during this period, it would be a challenge for customers and it would defer some of the loan demands. Because … business owners can absorb two challenges, but would be scared if they continue to face more. I feel that until Durga Puja [in October], it would be tough to comment on loan growth in this financial year. But we are very positive on the basis of the current situation.
Are you providing fresh loans to new microfinance customers? And, what about the average loan ticket size? As a bank we cannot say no to [a new customer]. But during the pandemic, fresh lending to new customers is not happening as much as in normal times. Now, we have stricter lending criteria for new customers. During the first quarter, average loan size came down compared to same period last fiscal.
In the EEB segment, collection efficiency for Q1FY22 stood at 86%, excluding NPA. What is the situation now? If you see our total collection amount and demands for EEB portfolio, actual collection efficiency stood at 98%. That means customers who have arrears have also started repaying the amount. It is a good sign for the bank. Collection efficiency will improve day by day with the help of customers. We hope it will normalise soon.
In the first quarter this fiscal, gross slippages stood at Rs 1,661 crore, out of which Rs 1,036 crore were from the EEB portfolio. As the bank saw gross slippages come down quarter-on-quarter, do you expect them to reduce further in the second quarter? We cannot predict slippages for Q2, given the current situation. If some slippages happen, it would not be a cause for worry for our bank when I see the collection efficiency increasing. In the first quarter, we saw around 74% and 84% of our NPA customers and restructured customers, respectively, were paying.
At the end of Q1FY22, the bank’s collection efficiency in Assam stood at 67%. Has it improved since then? Assam is very different today. When the entire country is open, mainly Assam and Kerala are in complete lockdown. Assam is experiencing a severe second Covid-19 wave and many districts are totally closed. We have no loan exposure in Kerala.
What is the update on the special one-time relief announced by the Assam government to microfinance borrowers? The state government have very clearly announced that it is not a debt waiver and emphasised the importance of maintaining good credit discipline. That is a very strong and positive message to customers. The government, however, has not mentioned the timeline for implementing the scheme. We are waiting for that. I hope that the government is working on it.
In Q4FY21, gross slippages were around Rs 3500 crore.
Private sector lender Bandhan Bank on Friday reported a 32.14% year-on-year (y-o-y) fall in net profit to Rs 373.08 crore in the first quarter of the current fiscal year on the back of additional provisions on non-performing assets (NPAs) and accelerated provisions on standard assets for potential impact of Covid-19.
During the first quarter of FY22, the lender made additional provisions on NPA amounting to Rs 750.83 crore for potential impact of Covid 19 on certain loan portfolios, while holding accelerated provisions of Rs 322.66 crore on standard assets as on June 30. The Kolkata-based bank had posted a Rs 549.82-crore net profit in the first quarter of 2020-21, while in the fourth quarter of 2020-21 the net profit was Rs 103.03 crore.
The total provision and contingencies during the quarter under review rose 61.93% YoY to Rs 1374 crore from Rs 849.06 crore in the same quarter previous fiscal year. Gross NPAs as a percentage of total loans increased 137 basis points quarter on quarter to 8.18% from 6.81% during the fourth quarter of the last fiscal. In Q1FY22, net NPA ratio, however, fell 22 basis points QoQ to 3.29% from 3.51% in Q4FY21.
Commenting on the performance, Chandra Shekhar Ghosh, MD and CEO of Bandhan Bank, said, “In spite of challenging environment due to Covid second wave, we have delivered the best-ever quarter in terms of operational performances. Collections continue to improve with Covid restrictions getting relaxed.”
During Q1FY22, the bank’s loan portfolio grew 8.1% YoY, while its EEB (erstwhile micro-banking segment) portfolio grew 12% YoY. Total collection efficiency for the EEB portfolio during the June quarter stood at 98%. Net interest income (NII) for the quarter grew 16.70% YoY to Rs 2,114.08 crore, against Rs 1,811.53 crore in the corresponding quarter of the previous year. Net interest margin (NIM) stood at 8.5%, up 35 bps from 8.15% for Q1FY21.
Ghosh said during Q1FY22, around Rs 4,661 crore of loans were restructured, while gross slippages stood at Rs 1,661 crore.
In Q4FY21, gross slippages were around Rs 3500 crore.
“EEB is 60% of our business and that is unsecured. And, situation was such that with Covid in the last quarter doorstep collections were not possible in many parts. So, slippages have been higher in this business,” said Sunil Samdani, CFO, Bandhan Bank. In terms of overall collection efficiency, the bank said July was better than June.
“Our growth situation is intact,” Ghosh said, adding the bank was focussing on transformation and diversification of its balance sheet for greater secure-unsecure loans balance.
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