Bandhan Q3 profit slips 14 %; flags concerns over Assam MFI law

Micro loans-focussed Bandhan Bank on Thursday reported 14 per cent decline in December quarter net profit at Rs 632.59 crore as provisions more than trebled.

The bank also flagged concerns over the impact of a recent law on MFI loans in pollbound Assam, which constitutes 8 per cent of its overall book, saying the loan collections have suffered in the last fortnight and it will be cautious while extending new loans.

The bank's core net interest income grew 34 per cent to Rs 1,541 crore on the back of a widening in net interest margin to 8.3 per cent from 7.9 per cent and 22.6 per cent growth in loan book. The other income grew handsomely to Rs 553.28 crore from Rs 357 crore in the yearago period.

The operating profit registered 51 per cent growth at Rs 1,914 crore during the quarter, but it was the provisions which hit the bottomline.

The total provisions of Rs 1,068 crore (which were Rs 294 crore in the year-ago period) included Rs 1,000 crore regarding the ones related to COVID-19.

Its chief financial officer Sunil Samdani said the overall credit costs due to COVID19 will come at 5 per cent of the advances as against the earlier estimate of 3.5 per cent but added that part of the money was already set aside in March 2020 quarter.