Bandhan Bank Shares Skyrocket 9% as Q2 FY25 Earnings Results Profit Surges 30% to ₹937 Crore

Bandhan Bank’s shares surged over 9% today following the release of its Q2 FY25 earnings report. The stock hit an intraday high of ₹184.82 on the NSE, marking a 9.27% increase.

On October 25, Bandhan Bank Ltd reported a 30% year-on-year increase in net profit, reaching ₹937.4 crore for Q2 ending September 30, 2024. This is up from ₹721.2 crore in the same quarter last year, beating CNBC-TV18’s projected profit of ₹888.7 crore.

Net Interest Income (NII) Growth

Net Interest Income (NII), which represents the income a bank earns from lending versus what it pays to depositors, rose 20.7% to ₹2,948.2 crore from ₹2,443.4 crore year-over-year.

Asset Quality and NPAs
Gross Non-Performing Assets (GNPA) increased to 4.68% in Q2 from 4.23% in the previous quarter. In terms of value, GNPA reached ₹6,105.3 crore, up from ₹5,304.4 crore quarter-over-quarter. Meanwhile, Net NPA grew slightly to 1.29% from 1.15%, amounting to ₹1,620.2 crore from ₹1,396.4 crore.

Operating Profit & Provisions
For the first half of FY25, Bandhan Bank recorded an operating profit of ₹3,796 crore, a 21% increase from ₹3,146 crore in H1 FY24. Provisions and contingencies (excluding tax) fell to ₹1,129 crore from ₹1,238 crore year-over-year.

Return Ratios & Capital Adequacy
Annualised Return on Assets (RoA) and Return on Equity (RoE) were 2.3% and 17.3%, respectively, for H1 FY25. The bank’s capital adequacy ratio, including profits, was 15.6%, above the regulatory benchmark of 11.5%.

Revenue & Net Interest Margin
Total net revenue for Q2 stood at ₹3,543 crore, marking a 19% increase from ₹2,984 crore in Q2 FY24. The Net Interest Margin (NIM) rose to 7.4%, compared to 7.2% in the previous year.

Provisions & Q2 Profit
Provisions (excluding tax) for Q2 were ₹606 crore, slightly lower than ₹636 crore a year ago. Profit after tax for Q2 FY25 came in at ₹937 crore, a 30% increase from ₹721 crore year-over-year, with annualised RoA at 2.1% and RoE at 15.8%.

Provision Coverage Ratio (PCR) and Collection Efficiency
The Provision Coverage Ratio (PCR) improved to 73.5% from 70% the previous year. Collection efficiency for Emerging Entrepreneurs Business (EEB) loans stood at 98.1% in Q2 FY25.

Strong Deposit and CASA Growth

Deposit Base
Total deposits reached ₹1.43 lakh crore as of September 30, 2024, up 27% from last year and 7% from the previous quarter. CASA deposits amounted to ₹47,283 crore, with the CASA ratio at 33.2%, indicating a strong retail deposit base.

CASA + Retail Term Deposits
The ratio of CASA plus Retail Term Deposits (TD) to total deposits stood at 68%, highlighting Bandhan Bank’s stable retail-focused deposit structure.

On October 28, 2024, Bandhan Bank Ltd’s share price opened at ₹175.00, touching the day’s high of ₹184.82 at 01:47 PM.

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.