Bandhan Bank share price down 2% post Q1 business updates. Loans rise, deposits dip sequentially. Buy, Sell or Hold?

Stock Market todays: Bandhan Bank share price declined 2% during the intraday trades on Thursday. While the Bandhan Bank share price opened at ₹210.25 slightly lower than previous close of ₹211.13, it did gain up to ₹214.60 on the NSE, with rise in the benchmark indices. The share price however dipped to lows of ₹206.16, almost 2% lower, as the quarterly updates showed sequential decline in deposits during the June'2024 quarter.

Loans show healthy growth , deposits dip sequentially

As per Bandhan Bank 1QFY25 Pre results quarterly updates reported on the exchanges, its total deposits declined 1.5% sequentially to ₹133,203 crore even though they were up 22.8% year-on-year. Bandhan Banks filing on the exchanges also said that its CASA deposits during the June'2024 at ₹44,453 crore declined 11.4% sequentially though growing 13.8% year-on-year. 

Also Read- Q1 results 2024 effect: Multibagger stock inches close to lifetime high as board sets date to consider quarterly results

Bandhan Banks Retail Deposits (including CASA) at ₹92,104 though up 19.2 % year on year , were down 1.8% sequentially while Bulk deposits at   ₹41,099 crore though up 13.6% y-o-y also were down 0.7% sequentially .

The positive however was the healthy growth in loans witnessed by the Bandhan Bank in seasonally weak quarter. The Loans & Advances (On book + Off Book + PTC) as per Bandhan Bank at approximately ₹125,619 crore grew 21.8% year on year and 0.7% sequentially. 

However with decline in deposits the ratios did see some impact. The Retail to Total Deposits (%) at 69.1% came lower than 69.4% in the previous quarter and 71.2% in the year ago quarter

Also Current Account Saving account of CASA ratio came at 33.4% in the June quarter compared to 37.1% in the previous quarter and 36.0 % in the year ago quarter.

Also Read- Suraj Estate shares soar 10% to hit new record high, zoom 94% in a month; more rally ahead?

Analysts views- Analysts at Jefferies India Pvt Ltd said that For Q1FY25, Bandhan Bank saw a healthy 22% year on year loan growth  (17/18% adjusted for base). Despite it being a seasonally weak quarter, loans rose 1% sequentially versus 5% last year said analysts at Jefferies.

Bandhan bank's loan-to-deposit ratio (LDR) rose by 200 basis points sequentially to 94% while analysts expected it to fall . Analysts at Jefferies said that the need to lower LDR may be drag on loan growth a bit in FY25. Collection efficiency improved versus last year & is a positive as per analysts.  Clarity on Credit Guarantee Funds for Micro Units (CGFMU) recovery & new CEO are triggers ahead.

Analysts at Motilal Oswal Financial Services Ltd in their Q1 preview have said that they expect Net interest margin moderation to continue for Bandhan Bank. The Asset quality is a key monitorable. While they expect earnings to remain healthy, expect cost ratios likely to remain elevated. MOFSL have Neutral ratings on Bandhan Bank

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions