Advances by Bandhan Bank grew by 21% during the pandemic

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Bandhan Bank, which has its roots in microfinance, expanded its advances by as much as 21% during the January-March quarter in the pandemic-hit FY21 compared with the figures in the corresponding quarter of FY20.

The total advances during the COVID-ravaged year stood at Rs 87,054 crore, which is 21% (more/less) compared to FY20 i.e. Rs 72,000 crore. The bank restructured home loans worth more than Rs 600 crore during the fiscal. The lender’s gross non-performing assets ratio improved to 6.8% as against 7.1% in Q3 in FY21.

The board of directors of Bandhan Bank recommended a dividend of Rs 1 each per equity share having a face value of Rs 10 each (10%) for FY21, subject to the approval of shareholders at the AGM.

Capital Adequacy Ratio (CAR), an indication of the stability of the bank, stood at 23.5%, much higher than the required level of 11%, stated the authorities while announcing the results of FY21.

“As the economy gradually recovered over the last one year, we have seen a healthy rise in business in the fourth quarter as well. As the country is going through a difficult phase again, we are committed to supporting our valued customers in whichever way we can,” said Chandra Shekhar Ghosh, chairman and managing director of the bank.

However, the bottom line of the bank took a hit with net profit for the quarter ended March 31, 2021, at Rs 103 crore, a dip of almost 80%, thanks to the authorities writing off loans in the microfinance business.

For the full FY21, net profit declined to Rs 2,205 crore – a decline of 27% compared to the previous year.

Ghosh emphasised that due to factors like the pandemic and the assembly elections in Bengal and Assam, their two key markets, collections of microcredit repayments were hit and that reflected on the performance in FY21.

“These factors made a huge negative impact on the book and almost 90% of our monthly collection was down since December 2020,” said Chandra Shekhar Ghosh.

However, the bank witnessed a robust business portfolio. Total deposits grew by 37% YoY to Rs. 77,972 crore and CASA deposit grew by as much as 61% YoY.

As of March 31, 2021 the total customer base of Bandhan Bank stood at 2.3 crore.