Bandhan Bank strong biz update hints at recovery process

Share price of the micro-lender Bandhan Bank rallied nearly 4% to Rs 370.70 on NSE, after it informed exchanges of its operations limping back to normalcy.
The private lender reported a deposit growth of 6% on a quarter basis to Rs 60,602 crore as on June 30. Year on year, deposits grew 35%.

Total advances grew 3% QoQ and 18 percent YoY to Rs74,325 crore in June, it said. The share of micro-banking deposits to total deposits stood at 5% on June 30 against 5.7% on March 31.
CASA ratio improved to 37.1% versus 36.8%, on a sequential basis.
Subsequent to Unlock 1.0, collection in the micro-banking loan vertical had shown positive traction from June 1.
There has been a steady improvement in collection efficiency (in value terms) during June. It ended with -68% as on June 30.

For non-micro banking advances, collection efficiency for June stands at 84% (resulting in an effective moratorium of -16%).
Interestingly, Bandhan Bank was one of the most active stocks on NSE. It surged over 118% in the last 3 months suggesting that investors had sensed recovery process is on the way as well as their faith in booming rural economy.

Not to forget, HDFC holds 8.98% stake in Bandhan Bank as a part of merger scheme.
Last November, the bank merged with Gruh Finance, which brought down the shareholding of the promoter from 82.26% to 60.96%.
The merger was part of the stake dilution exercise to meet the Reserve Bank of India’s (RBI) stipulation.

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