Bandhan Bank Q2 Results Preview: Net profit likely to jump 3.6 times boosted by robust NII growth, better asset quality

Bandhan Bank is scheduled to report its financial results for the September quarter on Wednesday, October 18. Analysts expect the Kolkata-headquartered lender to report a solid earnings show driven by double-digit growth in interest income and improving asset quality though some warn that margin pressure may persist. 

According to Zee Business research, the bank is likely to report a 3.6 times year-on-year jump in net profit to Rs 750 crore for the second quarter of the current financial year (Q2 FY24). The analysts estimate Bandhan Bank’s quarterly net interest income (NII), or the difference between the interest earned and the interest paid, at Rs 2,480 crore, up 13.1 per cent on a year-on-year basis. 

Bandhan Bank’s net interest margin (NIM)—a key measure of profitability—may come in at 6.9 per cent for the quarter ended September, marking a sequential fall of 40 basis points, according to the research. 

The lender is expected to register an improvement in its asset quality. Zee Business analysts peg Bandha Bank’s gross non-performing assets (GNPAs)—or gross bad loans—as a percentage of total loans pegged at 6.4 per cent for the July-September period, as against 6.76 per cent for the previous three months, according to Zee Business analysts.

They estimate its net non-performing assets (NNPAs) to decrease to 2.0 per cent for the September quarter from 2.18 per cent. 

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How Bandhan Bank fared in June quarter (Q1 FY24)

Bandhan Bank opened the financial year with a weak set of financial results. For the quarter ended June 30, the lender reported an 18.7 per cent fall in net profit to Rs 721.1 crore as its NII declined 0.9 per cent to 2,490.6 crore, both falling short of Street estimates.

The lender’s net interest margin stood unchanged sequentially at 7.3 per cent for the April-June period, according to a regulatory filing. 

Zee Business analysts had pegged the lender’s net profit at Rs 800 crore, NII at Rs 2,530 crore and NIM at 7.8 per cent for the fiscal first quarter. 

Its asset quality deteriorated, as its gross bad loans increased to 6.76 per cent from 4.87 per cent the previous quarter.  

Bandhan Bank shares: Past performance  

Bandhan Bank shares finished the September quarter with a gain of 3.9 per cent, better than a 2.4 per cent rise in the headline Nifty 50 index. 

As of October 16, the stock had lost about 10 per cent of its value in the past year while the Nifty rose about 14.5 per cent. 

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