Bandhan Bank (BANDHANBNK) Q4 22/23 earnings summary

Executive summary

• FY23 advances grew 10% to ₹1.09 lakh crore and deposits rose 12% to ₹1.08 lakh crore; customer base reached 3 crore.

• Portfolio diversification advanced: secured loans rose to 43% of the loan book from 36%; group loans fell to 35% of the asset book from 47%.

• Profitability recovered sharply as lower provisions supported PAT, while hiring, branch expansion and technology investment lifted operating costs and reduced operating profit.

Financial highlights

• Total net income rose 1.66% YoY to ₹11,728 crore; NII increased 6.25% to ₹9,260 crore.

• PAT was ₹2,195 crore versus ₹126 crore in FY22; PBT reached ₹2,893 crore versus ₹129 crore.

• Operating profit declined 11.5% to ₹7,091 crore; operating expenses rose to ₹4,637 crore from ₹3,524 crore, including higher staffing and expansion costs.

• Provisions and contingencies fell to ₹4,897 crore from ₹7,888 crore; total assets increased 12.1% to ₹1.56 lakh crore.

• Deposits grew 12.19% to ₹1,08,069 crore; net advances rose 11.47% to ₹1,04,757 crore and total business reached ₹2,17,191 crore.

Outlook and guidance

• FY24 priorities include geographic expansion, tighter underwriting and collections, further portfolio diversification, people development, and digital and data investment.

• Credit cost is targeted to return to the pre-pandemic level of below 2%; management linked improved profitability to continued credit-cost moderation.

• Migration of remaining business verticals to the new core banking system is planned for FY24; omnichannel mobile and internet banking and digital straight-through products are also planned.

• Commercial vehicle lending, loans against property for business and government business are being developed as additional growth and revenue channels.