BANDHAN BANK 2023-24 Annual Report Analysis

Tue, 30 Jul

BANDHAN BANK has announced its results for the year ended March 2024. Let us have a look at the detailed performance review of the bank during the year 2023-24.

BANDHAN BANK Income Statement Analysis

• Interest income during the year rose 18.6% on a year-on-year (YoY) basis.
• Interest expenses were up by 28.6% YoY during the same period.
• Operating expenses increased by 26.2% YoY during the year.
• The bank's net interest income (NII) increased by 11.5% YoY during the fiscal. Consequently, net interest margins (NIM) witnessed a growth and stood at 6.9% in FY24 as against 6.8% in FY23.
• Other income declined by 12.3% YoY during the year.
• Net profit for the year increased by 1.6% YoY.
• Net profit margins during the year declined to 11.8% in FY24 from 13.8% in FY23.

BANDHAN BANK Income Statement – 2023-24

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*	% Change
Interest Income	Rs m	159,047	188,696	18.6%
Other Income	Rs m	24,686	21,647	-12.3%
Interest Expense	Rs m	66,451	85,440	28.6%
Net Interest Income	Rs m	92,596	103,256	11.5%
Operating Expense	Rs m	46,368	58,508	26.2%
Pre-provision Operating Profit	Rs m	70,914	66,395	-6.4%
Provisions & Contingencies	Rs m	48,967	44,099	-9.9%
Profit before tax	Rs m	28,930	29,429	1.7%
Tax	Rs m	6,983	7,134	2.1%
Profit after tax	Rs m	21,946	22,296	1.6%
Minority Interest	Rs m	0	0	0.0%
Net Interest Margin	%	6.8	6.9
Net profit margin	%	13.8	11.8

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BANDHAN BANK Balance Sheet Analysis

• The bank's deposits during FY24 stood at Rs 1,352.0 bn as compared to Rs 1,080.6 bn in FY23, thereby witnessing an increase of 25.1%.
• Advances for the year stood at Rs 1,211.4 bn as compared to Rs 1,047.6 bn during FY23, a rise of 15.6%.
• Cost of deposits for BANDHAN BANK rose 6.3% and stood at 5.4%, while yield on advances rose to 13.6%.
• The lender's investments fell to Rs 292.9 bn during the year from Rs 323.7 bn in FY23.
• Borrowing stood at Rs 163.7 bn, a fall of 33.7% as compared to previous year.
• Overall, the total assets and liabilities for FY24 stood at Rs 1,778.4 bn as against Rs 1,560.4 bn during FY23, thereby witnessing a rise of 14.0%.

BANDHAN BANK Balance Sheet – as on March 2024

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*	% Change
Networth	Rs m	195,722	215,654	10.2%
Advances	Rs m	1,047,568	1,211,368	15.6%
Deposits	Rs m	1,080,647	1,352,020	25.1%
Yield on advances	%	13.1	13.6
Cost of Deposits	%	5.0	5.4
Investments	Rs m	323,659	292,876	-9.5%
Borrowings	Rs m	247,108	163,715	-33.7%
Total Assets	Rs m	1,560,371	1,778,417	14.0%

Current Valuations for BANDHAN BANK

• The trailing twelve-month earnings per share (EPS) of the bank stands at Rs 13.8, an improvement from the EPS of Rs 13.6 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 218.9, stands at 16.1 times its trailing twelve months earnings.
• The price to adjusted book value (P/ABV) ratio at current price levels stands at 1.6 times, while the price to income ratio stands at 1.9 times.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*
Income per share (Unadj.)	Rs	98.7	117.1
Earnings per share (Unadj.)	Rs	13.6	13.8
Diluted earnings per share	Rs	13.6	13.8
Avg P/E ratio	Rs	19.5	16.1
Avg P/ABV ratio	Rs	1.8	1.6
Avg Market Cap	Rs	428,241	358,803
Dividends per share (Unadj.)	Rs	1.50	1.50

Ratio Analysis for BANDHAN BANK

• Efficiency Ratios

  Credit/Deposit Ratio: The bank's credit/deposit ratio deteriorated and stood at 89.6x during FY24, from 96.9x during FY23. The credit/deposit ratio tells us how much money a bank has raised in the form of deposits and has deployed as loans.

  Debt to Equity Ratio: The bank's debt to equity ratio increased and stood at 7.03x during FY24, from 6.78x during FY23. The debt to equity ratio of a bank tells us how much debt a bank uses relative to its equity.

• Liquidity Ratios

  Capital Adequacy Ratio (CAR): BANDHAN BANK's capital adequacy ratio (CAR) was at 18.3% as on 31 March 2024 as compared to 19.8% a year ago. This ratio helps measure the financial strength of the bank or any finance company to meet their obligations using their assets and capital.

  A bank that has a good CAR has enough capital to absorb potential losses. Thus, it has less risk of becoming insolvent and losing depositor's money.

  Provision Coverage Ratio (PCR): Apart from CAR, you also need to take a look at the bank's PCR and LCR ratios. Provisioning coverage ratio (PCR) is the percentage of funds that a bank sets aside for covering losses due to bad debts.

  So a high PCR ratio means asset quality issues are under control and the bank is not vulnerable.

  Liquidity Coverage Ratio (LCR): The LCR is designed to ensure that banks hold a sufficient reserve of high-quality liquid assets to allow them to survive a period of significant liquidity stress lasting 30 calendar days.

• Profitability Ratios

  Return on Equity (ROE): The return on equity (ROE) ratio for the bank deteriorated and stood at 10.3% during FY24, from 11.2% during FY23. The ROE measures the ability of a firm to generate profits from its shareholders capital in the company.

  Return on Assets (ROA): The return on asset (ROA) ratio of the bank deteriorated and stood at 1.25% during FY24, from 1.41% during FY23. The ROA measures how efficiently the company uses its assets to generate earnings.

  Return on Capital Employed (ROCE): The ROCE for the bank improved and stood at 10.30% during FY24, from 10.01% during FY23. The ROCE measures the ability of a bank to generate profits from its total capital (shareholder capital plus debt capital) employed in the bank.

• NPA Ratios

  Gross NPA Ratio: The gross NPA ratio is the ratio of a bank's gross NPAs to gross advances. BANDHAN BANK's gross NPA ratio stood at 3.8% as of 31 March 2024 compared to 4.9% in the same period a year ago.

  A high gross NPA ratio is a bad thing as it indicates how much of a bank's loans are in danger of not being repaid.

  Net NPA Ratio: In simple language, net NPAs are simply the total non-performing assets minus the provision left aside. It gives you the exact value of NPAs after the bank has made provisions.

  The net NPA ratio of BANDHAN BANK was 1.1% in financial year 2024. This compared with 1.2% a year ago.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*
Credit/Deposit Ratio	x	96.9	89.6
Debt to Equity Ratio	x	6.8	7.0
Loans / Deposits	x	0.2	0.1
Capital Adequacy Ratio	%	19.8	18.3
Return on Equity	%	11.2	10.3
Return on Assets	%	1.4	1.3
Return on Capital Employed	%	10.0	10.3
% of Gross NPAs	%	4.9	3.8
% of Net NPAs	%	1.2	1.1
Yield on Advances	x	13.1	13.6
Yield on Investments	x	6.1	7.3

To see how BANDHAN BANK has performed over the last 5 years, please visit here.

BANDHAN BANK Share Price Performance

Over the last one year, BANDHAN BANK share price has moved up from Rs 217.1 to Rs 218.9, registering a gain of Rs 1.8 or around 0.8%.

Meanwhile, the S&P BSE BANKEX is trading at 58,608.6 (down 0.1%). Over the last one year it has moved up from 51,319.7 to 58,608.6, registering a gain of 7,289.0 points (up 14.2%).

Overall, the S&P BSE SENSEX is up 22.0% over the year.

(To know more, you can check out historical annual results for BANDHAN BANK here and quarterly results for BANDHAN BANK here)