Bandhan Bank Shares Slump to 3-Year Low

Bandhan Bank shares plunged 8% to a three-year low, marking a three-day losing streak of 14%.

Shares of Bandhan Bank hit a three-year low of Rs 185.45 in intraday trade on Tuesday, falling 6% on the BSE on heavy volume. Shares in private-sector banks were quoted at their lowest levels since April 2020. It hit an all-time low of Rs 152.35 on March 25, 2020.

At 3:02 pm, Bandhan Bank was trading down 5% at Rs 187.55, while the S&P BSE Sensex rose 0.01%. The average trading volume on the counter jumped 1.5 times today. About 24.5 million shares changed hands on the NSE and BSE, representing 1.5% of the bank’s total share capital.

Over the past two months, the bank reported a 66.2% year-on-year decline in its December quarter (Q3FY23) profit to Rs 290.6 crore, while the stock fell 23% after its net interest income (NII) fell 2.1% year-on-year to Rs 2,080.4 crore.

The bank said the decline in NII was mainly due to a reversal in interest income and higher funding costs. The bank’s net interest margin was 6.5% in the quarter, compared with 7% in the previous quarter. During the quarter, banks sold Rs 8,897 crore of cancelled loans with a total value of Rs 801 crore, of which Rs 387 crore had been issued as securities receipts.

Management had said that based on initial trends in growth and reports, they believed the bank’s performance would improve nicely in the fourth quarter.

According to KRChoksey Shares and Securities analysts, Bandhan’s sluggish financial performance in the third quarter of FY23 has impacted NII’s higher revenue and provisioning levels due to slower overall business growth, which has hit overall profitability. It added that credit growth was moderate due to slower growth in the microfinance institution (MFI) sector.

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