Provisions of the lender nearly doubled YoY to 1,594.3 crore in Q4FY21 as compared to Rs 827.4 crore in Q4FY20 and 1,068.7 crore in Q3FY21. The bank has written off loans to the tune of Rs 1,930 crore in the reporting quarter, and a large portion of it, about Rs 1,850 crore, is from the microfinance
book, and for the full year, it was to the tune of Rs 2,038 crore.
“Technically, as per our policy we could have retained these loans for a longer period of time but we decided to strengthen our balance sheet as fast as possible hence we have taken these accelerated write-offs," said Sunil Samdani, CFO, Bandhan Bank.
Post-write-off, the gross NPA ratio of the lender at the end of March quarter stood at 6.8 per cent compared to 7.1 per cent in the previous quarter (proforma). The net NPA ratio stood at 3.5 per cent compared to 2.4 per cent in the previous quarter.
During the quarter, the bank has restructured accounts carrying a value of Rs 617 crore of housing finance vertical comprising 0.71 per cent of the total portfolio of the bank. The bank management said they have not restructured advances in the microfinance
“A very challenging year ended on a positive note with growth and collection coming back to normalcy. With accelerated provisioning and write-off, we are now well placed as we enter FY 22. We remain cautious but confident as we deal with the Covid19 second wave. We remain committed to our strategy that we have presented last quarter of granular, diversified, and quality growth,” said Chandra Shekhar Ghosh, MD&CEO, Bandhan Bank.
Overall collection efficiency of the lender in their microfinance
portfolio at the end of March quarter stood at 95 per cent, compared with 92 per cent at the end of December quarter. In West Bengal and Assam, the collection efficiency of the bank was 95 per cent and 83 per cent, respectively.
Top-up loans provided by the banks fell to Rs 260 crore in the March quarter as compared to Rs 920 quarter in the December quarter and the bank management said these loans were not provided to borrowers to avoid restructuring under the Reserve Bank of India’s (RBI’s) covid resolution package.
“As the economy started opening up, the demand for top-up loans, naturally, came down. So, we do not see this trend changing based on the assumption that the second wave should settle down in 2-3 months’ time. So, if that is the case, we do not see much increase in the top-up loans," said Samdani.
Total advances of the lender, including on book exposures, off-book exposures, and TLTRO, grew by 21.2 per cent to Rs 87,042.9 crore at the end of March quarter compared to Rs 71,846 crore in the year-ago period. On the other hand, total deposits of the bank grew by 36.6 per cent to Rs 77,972.2 crore in the same period.
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