BANDHAN BANK 2022-23 Annual Report Analysis

Fri, 21 Jul

BANDHAN BANK has announced its results for the year ended March 2023. Let us have a look at the detailed performance review of the bank during the year 2022-23.

BANDHAN BANK Income Statement Analysis

• Interest income during the year rose 14.7% on a year-on-year (YoY) basis.
• Interest expenses were up by 28.9% YoY during the same period.
• Operating expenses increased by 31.6% YoY during the year.
• The bank's net interest income (NII) increased by 6.3% YoY during the fiscal. Consequently, net interest margins (NIM) witnessed a decline and stood at 6.8% in FY23 as against 7.1% in FY22.
• Other income declined by 12.5% YoY during the year.
• Net profit for the year increased by 1644.6% YoY.
• Net profit margins during the year increased to 13.8% in FY23 from 0.9% in FY22.

BANDHAN BANK Income Statement – 2022-23

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Interest Income	Rs m	138,716	159,047	14.7%
Other Income	Rs m	28,225	24,686	-12.5%
Interest Expense	Rs m	51,571	66,451	28.9%
Net Interest Income	Rs m	87,145	92,596	6.3%
Operating Expense	Rs m	35,236	46,368	31.6%
Pre-provision Operating Profit	Rs m	80,134	70,914	-11.5%
Provisions & Contingencies	Rs m	78,876	48,967	-37.9%
Profit before tax	Rs m	1,286	28,930	2149.2%
Tax	Rs m	28	6,983	24576.3%
Profit after tax	Rs m	1,258	21,946	1644.6%
Minority Interest	Rs m	0	0	0.0%
Net Interest Margin	%	7.1	6.8
Net profit margin	%	0.9	13.8

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BANDHAN BANK Balance Sheet Analysis

• The bank's deposits during FY23 stood at Rs 1,080.7 bn as compared to Rs 963.3 bn in FY22, thereby witnessing an increase of 12.2%.
• Advances for the year stood at Rs 1,047.6 bn as compared to Rs 939.7 bn during FY22, a rise of 11.5%.
• Cost of deposits for BANDHAN BANK rose 12.6% and stood at 5.0%, while yield on advances rose to 13.1%.
• The lender's investments rose to Rs 323.7 bn during the year from Rs 290.8 bn in FY22.
• Borrowing stood at Rs 247.1 bn, a growth of 24.0% as compared to previous year.
• Overall, the total assets and liabilities for FY23 stood at Rs 1,557.7 bn as against Rs 1,390.0 bn during FY22, thereby witnessing a rise of 12.1%.

BANDHAN BANK Balance Sheet – as on March 2023

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Networth	Rs m	173,759	195,722	12.6%
Advances	Rs m	939,749	1,047,568	11.5%
Deposits	Rs m	963,306	1,080,693	12.2%
Yield on advances	%	13.0	13.1
Cost of Deposits	%	4.5	5.0
Investments	Rs m	290,787	323,659	11.3%
Borrowings	Rs m	199,212	247,108	24.0%
Total Assets	Rs m	1,389,952	1,557,700	12.1%

Current Valuations for BANDHAN BANK

• The trailing twelve-month earnings per share (EPS) of the bank stands at Rs 13.6, an improvement from the EPS of Rs 0.8 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 217.9, stands at 19.5 times its trailing twelve months earnings.
• The price to adjusted book value (P/ABV) ratio at current price levels stands at 1.8 times, while the price to income ratio stands at 2.7 times.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*
Income per share (Unadj.)	Rs	86.1	98.7
Earnings per share (Unadj.)	Rs	0.8	13.6
Diluted earnings per share	Rs	0.8	13.6
Avg P/E ratio	Rs	380.6	19.5
Avg P/ABV ratio	Rs	2.6	1.8
Avg Market Cap	Rs	478,800	428,241
Dividends per share (Unadj.)	Rs	0.00	1.50

Ratio Analysis for BANDHAN BANK

• Efficiency Ratios

  Credit/Deposit Ratio: The bank's credit/deposit ratio deteriorated and stood at 96.9x during FY23, from 97.6x during FY22. 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 6.78x during FY23, from 6.69x during FY22. 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 19.8% as on 31 March 2023 as compared to 20.1% 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 improved and stood at 11.2% during FY23, from 0.7% during FY22. 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 improved and stood at 1.41% during FY23, from 0.09% during FY22. 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 10.01% during FY23, from 2.70% during FY22. 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 4.9% as of 31 March 2023 compared to 6.5% 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 1.2% in financial year 2023. This compared with 1.7% a year ago.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*
Credit/Deposit Ratio	x	97.6	96.9
Debt to Equity Ratio	x	6.7	6.8
Loans / Deposits	x	0.2	0.2
Capital Adequacy Ratio	%	20.1	19.8
Return on Equity	%	0.7	11.2
Return on Assets	%	0.1	1.4
Return on Capital Employed	%	2.7	10.0
% of Gross NPAs	%	6.5	4.9
% of Net NPAs	%	1.7	1.2
Yield on Advances	x	13.0	13.1
Yield on Investments	x	5.9	6.1

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 down from Rs 283.3 to Rs 217.9, registering a loss of Rs 65.4 or around 23.1%.

Meanwhile, the S&P BSE BANKEX is trading at 52,122.8 (down 0.2%). Over the last one year it has moved up from 41,784.4 to 52,122.8, registering a gain of 10,338.4 points (up 24.7%).

Overall, the S&P BSE SENSEX is up 20.4% over the year.

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