Mumbai: Bandhan Bank on Thursday said a ₹ 385 crore loan made to a borrower from the “infrastructure development and finance sector" had turned sour in the December quarter (Q3). Without naming Infrastructure Leasing and Financial Services Ltd (IL&FS), the bank said it fully provided for the loan in the same quarter.
Bandhan Bank managing director and chief executive officer, Chandra Shekhar Ghosh, said the loan was a secured asset with AAA rating. This loan was the only exposure it had in the infrastructure space and there was no loan above ₹ 25 crore on its books, other than a few loans to micro finance institutions (MFIs). “This loan was taken in two tranches in 2016 and then again about a year back," Ghosh said.
He added that the bank is keen on penetrating the affordable housing segment. “Another segment we decided to penetrate is the affordable housing segment as there is a lot of demand for houses but the segment is still under-penetrated."
The bank reported net profit of ₹ 331.20 crore in the three months to 31 December 2018, up 10.3% from the same period last year. The bank’s provisions in Q3 trebled on a year-on-year basis to ₹ 378 crore and its gross non-performing assets (NPA) as a percentage of its total advances stood at 2.41%.
On Monday, Bandhan Bank announced the acquisition of HDFC Ltd-owned Gruh Finance Ltd through a share swap, in a deal effective 1 January.
While experts say the Bandhan-Gruh deal favours HDFC more than the shareholders of Bandhan Bank and Gruh Finance, Ghosh defended the merger and said people were looking at near-term benefits, while he was looking at how this will play out in the long term.
“Acquiring Gruh is an avenue for Bandhan Bank to grow our business. I started this organization as an MFI (microfinance institution) and that time, people were confused if the business would survive. Even when the bank began operations three years ago, people questioned who will deposit their money with Bandhan Bank; but we now have 41.4% current and savings account ratio," Ghosh said.
Mint reported on 9 January that Bandhan Bank’s merger with Gruh Finance appears to be a deal that was born out of compulsion and was anything but sweet for minority shareholders of the bank and the mortgage lender, citing analysts.
Bandhan Bank said the share swap ratio for the Gruh Finance merger would be 568 shares of Bandhan Bank for every 1,000 shares of Gruh. This essentially means a share swap ratio of 0.6, or 3:5, between Bandhan Bank and Gruh Finance. HDFC holds 57.83% in Gruh Finance as the promoter, while Bandhan Financial holds around 82.28% in Bandhan Bank.
On Thursday, Bandhan Bank shares rose 3.82%, or ₹ 17.35, to ₹ 471.70 apiece on the BSE while the benchmark Sensex fell 0.29%, or 106.41 points, to end the day at 36,106.50 points.