Stress in microfinance portfolio forced Bandhan Bank to report a 65% drop in first quarter net profit at Rs 372 crore as compared with Rs 1063 crore in the year ago period.High slippages in the microfinance book, rise in provisions to cover the bad loans led to the fall.
Asset quality deteriorated with gross non-performing assets ratio rising to 4.96% at the end of June from 4.23% a year back."We anticipate the challenge in the emerging business segment to continue in the second quarter.
Things will start getting better from the third quarter," managing director Partha Pratim Sengupta said.Provisions and contingencies for the quarter under review jumped 119% year-on-year at Rs 1147 crore, largely on account of provisions to cover bad loans and write-off of ageing loans.Fresh slippages stood at Rs 1553 crore out of which Rs 1083 crore was on account of micro loans, said chief financial officer Rajeev Mantri.
The bank wrote off loans to the tune of Rs 1047 crore during the quarter.Live EventsThe bank's operating profit stood 14% lower at Rs 1668 crore against Rs 1941 crore, on account of a 8% decline in net interest income at Rs 2757 crore.
Other income however rose 33% at Rs 726 crore.The net interest margin for the quarter stood at 6.4%, 117 basis points lower from what it was in the year-ago period.The bank, which was a microfinance company before its transformation into a universal bank in 2015, has reduced the share of group micro loans to 25.2% from 32.3% a year back.The bank's gross loan portfolio expanded by 6.4% year-on-year to Rs 1.34 lakh crore even as it shrank 2.5% from the March 2025 level.Wholesale banking and housing finance, which are Bandhan's major focus at this point, have grown 32% and 15% respectively.
Wholesale banking accounted for 27.7% while housing finance contributed 24.4%.The bank's deposits grew 16% year-on-year to Rs 1.55 lakh crore with the share of current and savings accounts falling to 27.1% from 33.4%.