Bandhan Bank – in a sweet spot?

Bandhan Bank Q1 FY25 Concall Summary

• Ratan Kumar Kesh has been appointed as the interim MD and CEO of the company, effective from July 10, 2024 for a period of 3 months or until the new appointment whichever happens earlier.
• Q1 previously has been a soft quarter for the bank, however there were improvements this time. Reason stated was due to more focus on secure lending. They’re trying to reduce the seasonality effect.
• There was slight increase in the cost of fund but they were able to maintain their margins.
• Gross NPA is at 4.2% and net NPA is at 1.1% versus 3.8% and 1.1 respectively in Q4FY24.
• Due to RBI mandate on risk weights, the board approved an increase in the risk weight for the EEB (Emerging Entrepreneurs Business) portfolio from 75% to 125% which resulted in decrease of CRAR by 362 basis points.
• Some new products launched recently – LCs, Forex, Bank Guarantees, Bill Invoicing and remittances in our transaction banking space, BharatQR, Tax Collection service.
• 5 states contributed 59% of the gross advances, West Bengal with 24%. 5 states contributed about 64% of total deposits of which West Bengal contributed 39%.
• Continuing with the guidance of NIMs in the range of 7% to 7.5%
• The bank intends to maintain a stable outlook on its lending to NBFC MFIs and more focus on secured lending, mention of muted growth in the segment.
• The bank plans to continue its strategy of growing its secured loan book, with a projected loan book growth rate of 18% to 20% with higher deposit rate than the secured loan book.
• Not looking to raise capital, confident to maintain growth and risk for the next 3 years.
• New branches will be lesser than previously, bank staff has increased however going forward, the addition may be less compared to last 3 years due to digitization.

I’ve tried to mention whatever points I felt were of value. If someone wants to add more points feel free to do so. For the number crunching, Link to PPT

Any and every feedback is appreciated.