The shares of Bandhan Bank experienced a decline of 7.40%, reaching ₹233.10 per share, in today’s trading session amid a sharp spike in trading volumes. In the previous trading session, the stock fell by 3.49%, resulting in a cumulative drop of 10.65% over the two days. Analysts attribute this sharp drop in the banking stocks to profit booking.
On January 4, the bank reported an 18.6% YoY and 7.7% QoQ improvement in loans and advances, reaching ₹1,15,964 crore for the quarter ending December. The bank’s total deposits grew by 14.8% YoY to ₹1,17,422 crore in Q3 FY24. The Current Account and Savings Account (CASA) came at ₹42,413 crore, marking a 14% increase from ₹37,212 crores.
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According to Atul Parakh, CEO of Bigul, “In the Q3FY24 interim update, Bandhan Bank has shown growth in loans and advances and total deposits both sequentially and year-on-year. Its asset quality, which did not appear to be up to the mark earlier, is now maintained at an adequate level. Its collection efficiency is also good. The bank is progressing according to management’s expectations. Among short-term factors, there was a general market correction during both days (6th and 8th January 2024) saw a slight decline in the Indian stock market, affecting Bandhan Bank along with other stocks. After a recent rise in share price, some investors may have sold to secure profits, indicating profit booking and leading to a temporary decline.”
Meanwhile, global brokerage firm Jefferies maintained a “buy” call on the stock with a target price of ₹254 per after the bank’s Q3 FY24 update. Despite a slightly soft collection efficiency (CE) in the non-MFI segment, the brokerage highlighted that the overall CE remained constant at 98%, exhibiting a flat year-on-year (YoY) and quarter-on-quarter (QoQ) trend. .
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Q2FY24 Scorecard
For the September quarter (Q2FY24), the bank reported a net profit of ₹721 crore, driven by a decline in supply cost. This marked a significant improvement compared to the net profit of ₹209 crore reported in the corresponding quarter of the previous year. Bandhan Bank’s net interest income (NII) for the quarter entered ₹2,443 crore, with a net interest margin (NIM) of 7.2%.
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Provisions (excluding tax) and contingencies decreased to ₹636 crore in Q2FY24 from ₹1,280 crore in the same quarter a year ago. The gross non-performing assets in Q2FY24 were reported at 7.3%, a slight increase from 7.19% in Q2FY23.
Subordinated Activity
In CY23, Bandhan Bank stock delivered a modest gain of 3.05%, behind the Nifty Bank index, which registered a robust return of 12.34% during the same period. Since its listing in 2018, the stock has shown a downward trend, currently standing 37.84% lower than its issue price of ₹375 per share.
Disclaimer: The opinions and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before making any investment decisions.
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Published: 08 Jan 2024, 17:17 IST