Bandhan Bank Releases Business Update for June Quarter

Bandhan Bank Ltd. recently announced an update for the June quarter and reported a 21.8% YoY increase in loans and advances for the June quarter, reaching Rs.1,25,619 crore compared to Rs.1,03,169 crore in the same period last year which shows an increase in the bank’s lending capacity, aligning with the overall positive trends in the banking sector.

CASA Deposits and Ratios

The bank’s Current Account Savings Account (CASA) deposits rose by 13.8% YoY, amounting to Rs.44,453 crore. However, the CASA ratio, indicating the proportion of low-cost deposits, dipped slightly to 33.4% from 36% in the previous year. A lower CASA ratio suggests a reliance on costlier wholesale funding, potentially impacting the bank’s margins.

Overall Deposit Growth

Bandhan Bank’s total deposits saw a 22.8% increase YoY, totaling Rs.1,33,203 crore, up from Rs.1,08,480 crore. Retail deposits, which include CASA, rose by 19.2% to Rs.92,104 crore, representing 69.1% of total deposits. The liquidity coverage ratio as of June 30, 2024, stood at 149.5%, highlighting the bank’s strong liquidity position. Bandhan Bank’s retail deposits stood at Rs.92,104 crore, up 19.2%. 

Analysts’ View & Stock

Most of the market experts suggest holding the stock at present. The bank’s stock price surged over 4% yesterday, closing at Rs.210.35 per share, outperforming the NSE Nifty 50, which advanced by 0.67%. However, the price is 2% down today.  Despite this recent uptick, Bandhan Bank’s stock has corrected nearly 15% year-to-date.

Conclusion: The bank’s business update for the June quarter highlights a strong performance in loans, advances, and deposits, despite a slight dip in the CASA ratio. The growth in retail deposits and a strong liquidity coverage ratio further bring out the bank’s strong financial health for this quarter. 

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.