We investigate sparse matrix bipartitioning -- a problem where we minimize the communication volume in parallel sparse matrix-vector multiplication. We prove, by reduction from graph bisection, that this problem is $\mathcal{NP}$-complete in the case where each side of the bipartitioning must contain a linear fraction of the nonzeros. We present an improved exact branch-and-bound algorithm which finds the minimum communication volume for a given matrix and maximum allowed imbalance. The algorithm is based on a maximum-flow bound and a packing bound, which extend previous matching and packing bounds. We implemented the algorithm in a new program called MP (Matrix Partitioner), which solved 839 matrices from the SuiteSparse collection to optimality, each within 24 hours of CPU-time. Furthermore, MP solved the difficult problem of the matrix cage6 in about 3 days. The new program is on average more than ten times faster than the previous program MondriaanOpt. Benchmark results using the set of 839 optimally solved matrices show that combining the medium-grain/iterative refinement methods of the Mondriaan package with the hypergraph bipartitioner of the PaToH package produces sparse matrix bipartitionings on average within 10% of the optimal solution.