Bandhan Bank FY24 Annual Earnings Summary
4 quarters covered · ₹0 Cr revenue · ₹2,230 Cr PAT · 0.0% average EBITDA margin.
Quarter-by-quarter progression
Management promises made during the year
Promise tracking available after 2+ quarters of coverage.
Risks flagged during the year
Despite DPD reduction, gross slippages remained high at INR 1,320 crore, with EEB contributing INR 1,000 crore. Management expects H2 improvement but past trends show elevated slippages in H2 as well.
Q3 FY24 · highNCGTC is conducting a detailed forensic audit on CGFMU claims; adverse findings could impact recoveries and provisions.
Q4 FY24 · highThe pending CGFMU audit may not yield the expected positive result, potentially impacting recoveries and capital.
Q4 FY24 · highFounder MD & CEO Chandra Shekhar Ghosh is retiring on July 9, 2024, and a successor has not yet been identified, creating leadership uncertainty.
Q1 FY24 · mediumQ1 slippages of INR 920 crore from the EEB book were higher than expected, though management cites seasonality.
Q1 FY24 · mediumMigration to a new core banking system in Q2 may cause operational disruption for 2-3 weeks, impacting growth.
Q1 FY24 · mediumCost of deposits rose 60bps QoQ due to mix shift and TD repricing; further repricing of ~60bps may pressure NIM.
Q2 FY24 · mediumCGFMU recovery of ~INR 1,600 crore delayed due to audit queries; ECLGS recovery of INR 410 crore pending due to operational constraints. Management could not provide a timeline.
Q2 FY24 · mediumCost of funds expected to rise 20-25 bps in coming quarters due to savings rate hike and term deposit repricing, which could pressure NIMs despite higher yields.
Q3 FY24 · mediumAs the bank increases secured asset share, yields may decline, potentially pressuring NIMs despite cost controls.
Q3 FY24 · mediumManagement expects INR 300-500 crore quarterly slippage addition, but this may vary if collection efficiency weakens.
Q4 FY24 · mediumDespite improvement, slippages remain elevated at ₹1,017 crore; analysts questioned whether the run rate is truly sustainable.
What changed through the year
Q1 FY24 · Loan growth of 20%+ in FY24
Advances expected to grow over 20% for the full year, with microfinance growing 17%.
Q1 FY24 · Credit cost around 2% with 20bps variance
Credit cost guided at approximately 2%, with a possible variance of 20 basis points.
Q1 FY24 · NIM guidance of 7-7.5%
Net interest margin expected to remain in the 7% to 7.5% range.
Q1 FY24 · Branch count target of 1,600 by FY24 end
Bank plans to reach approximately 1,600 branches by the end of the financial year.
Q2 FY24 · Loan growth of ~20% YoY for FY24
Management expects overall advances to grow nearly 20% year-on-year, driven by festive demand and strong disbursements in H2.
Q2 FY24 · Credit cost guidance of 2% ±20bps for FY24
The bank expects credit cost to remain in the range of 1.8% to 2.2% for the full year, supported by lower slippages and higher recoveries in H2.
Q2 FY24 · OpEx to assets ratio of 3.5% for FY24
Management guided for operating expenses to assets ratio of 3.5% for FY24, with balance sheet growth in H2 absorbing costs.
Q2 FY24 · Secured loan share target of 50% by FY26
The bank aims to increase the share of secured assets to 50% of total advances by fiscal year 2026, up from 44% currently.
Q3 FY24 · Secured assets to reach ~50% by FY26
Management expects secured portfolio share to increase from current 44.5% to nearly 50% by FY26.
Q3 FY24 · NIM to remain in 7%-7.5% range near-term
Management guided NIM to stay around 7%-7.5% in the near term, with a strategic review in March.
Q3 FY24 · ROA target of 2.5%-2.8% and ROE of 14%-18%
Medium-term guidance for ROA and ROE, with detailed three-year plan to be shared after February strategy meet.
Q4 FY24 · Loan growth of 17-20% in FY25
Management expects total advances to grow 17-20% over the next 2-3 years, with EEB growing 14-15%.
Q4 FY24 · Normalized credit cost of 1.8-2% in FY25
CFO guided for total portfolio credit cost between 1.8% and 2% in FY25, down from 3.4% in FY24.
Q4 FY24 · Deposit growth to outpace advances growth
Bank aims for liability-first approach with deposits growing faster than assets to improve CD ratio.
Q4 FY24 · CGFMU claim resolution expected in Q1 FY25
Management expects the pending CGFMU audit to conclude in Q1 FY25, with a positive outcome anticipated.