Private lender Bandhan Bank Ltd on Friday reported a 66% slump in third-quarter profit, hurt by higher provisions and lower interest income.
Net profit for the quarter-ended Dec.31, 2022, fell to 2.91 billion rupees ($35.85 million) from 8.59 billion rupees a year earlier, with provisions and contingencies rising 91%.
Higher provisions for stressed loans also pushed its credit cost up to 6.4% in the quarter from 3.7% a year earlier. The lender's asset quality improved slightly, with gross bad loans as a share of total loans at 7.15% from 7.19% in the September quarter.
"In terms of asset quality and stress, we see the worst is behind us and expect overall business momentum to remain robust from Q4 FY23 (fourth quarter of fiscal year 2023) onwards," said Managing Director and Chief Executive Officer Chandra Shekhar Ghosh.
Borrowing in India has gathered pace in recent months as pandemic curbs eased and the economy reopened. However, Bandhan Bank's loan growth slowed sequentially to just over 11%, lagging behind its rivals.
The Kolkata-headquartered bank, which earlier focused on providing "micro-credit" to low-income people mostly in the eastern states of India, has been trying to widen its reach in retail and housing sectors.
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Net interest income, the difference between interest earned and paid, fell 2.1% to 20.80 billion rupees, while net interest margin, a key measure of profitability, fell to 6.5% from 7.8% a year ago.
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