Bandhan Bank Limited — Q1 FY25
Bandhan Bank reported a strong Q1 FY25 with PAT of INR 1,063 crore (+47% YoY) driven by robust advances growth of 22% YoY and stable NIM of 7.6%.
bullish
high
Financial stats pending filing verification
Claim Ledger
Did management answer the analysts?
Every material analyst question, graded on whether management actually answered it — with the verbatim exchange and quantitative claims checked against filed numbers.
71%Questions answered2Evaded / deflected12Questions audited
Answered
Medium priority
Was there any one-off in other interest income?
Asked by Prabal Gandhi, Ambit Capital
Management clearly denied any one-offs and explained the source of growth.
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Question
My first question was on margins. Was there any one-off in other interest income?
Ratan Kumar Kesh, Managing Director and CEO, Bandhan Bank
No, there were no one-offs in the other income. This represents the underlying growth that we've seen in the business, brought by increase in processing fee as well as the other elements of other income.
Partial answer
High priority
How do you think about cost of funds given CASA drop?
Asked by Prabal Gandhi, Ambit Capital
Acknowledged pressure but did not quantify expected cost of funds impact.
no specific cost of funds guidancereframed to retail deposit stability
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Question
And how do you think about since our CASA ratio has dropped by 400 basis points, how do you think about cost of funds going back?
Rajeev Mantri, CFO, Bandhan Bank
So, yeah, I think as we had mentioned, while the CASA ratio we saw on a quarter-on-quarter basis a decline. On a year-on-year basis, it still represented a good growth. But as we have mentioned, the retail deposits overall, which is retail term deposits plus CASA, remains stable at about 69%.
Answered
High priority
How to think about margins going forward?
Asked by Prabal Gandhi, Ambit Capital
Reiterated existing NIM guidance with a range.
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Question
And context of that, how to think about margins going back?
Rajeev Mantri, CFO, Bandhan Bank
So as guided before, we will continue to maintain our NIM in the range of 7%-7.5%, depending on how the overall interest rate looks like.
Answered
High priority
How are you thinking about diversification away from MFI?
Asked by Prabal Gandhi, Ambit Capital
Clearly stated strategy to grow secured book faster, addressing diversification.
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Question
Sir, on this diversification, so how to think about our exposure to the MFI segment? Because on one side, we are reducing our share of direct lending, but at the same time, we are also increasing our lending to NBFC MFIs.
Ratan Kumar Kesh, Managing Director and CEO, Bandhan Bank
Within the products, we are looking to improve the share of our secured assets portfolio, and that will be the direction where we are trying to increase that, which would mean that while the asset growth will happen both in the microfinance book as well as the secured book, the growth percentage for the secured book will be faster compared to the microfinance.
Answered
High priority
Is the reduced seasonality in AUM a new normal?
Asked by Jay Mundra, ICICI Securities
Confirmed it is a new normal driven by strategic shift to secured book.
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Question
In the opening remarks, you mentioned that we have managed to reduce the cyclicality that we usually have in the first quarter in terms of QOQ decline in the AUM. So if you can elaborate, is this a new normal?
Rajinder Kumar Babbar, Executive Director and Chief Business Officer, Bandhan Bank
So as a part of this strategy, our main focus is how we can grow on this secured book as compared to the other book by keeping a proper product mix. So as part of that strategy, this is the normal growth, and we have taken because you will see our book, you will see the portfolio, the housing finance, the retail asset basically has grown steadily.
Answered
High priority
Is the CET1 Tier 1 reduction final or still under discussion?
Asked by Jay Mundra, ICICI Securities
Clearly stated the decision is final and not under further discussion.
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Question
Secondly, sir, on this CET1 Tier 1 reduction, is that the final decision by the bank, of course, in the sense that is there any chance that you still are having discussion with the regulator or any final authority here?
Rajeev Mantri, CFO, Bandhan Bank
As of now, this is a finality to our decision, and this is what we have done and moved ahead.
Answered
Medium priority
Will you change MFI rates to adjust for higher risk weight?
Asked by Jay Mundra, ICICI Securities
Gave a clear 'no' without hedging.
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Question
And you also seem to be one of the lowest-rate bank in the MFI segment. Are you thinking of changing the rates to adjust for the risk-weighted capital yield?
Rajeev Mantri, CFO, Bandhan Bank
Not as of now.
Partial answer
High priority
Will SMA 0+1+2 book continue to reduce?
Asked by Jay Mundra, ICICI Securities
Highlighted past improvement but avoided a clear forward-looking statement on reduction.
acknowledged improvement but did not commit to continued reductioncited macro risks
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Question
Would you believe that this number of 0 + 1 + 2 in absolute amount should start reducing, or you think that there is still some uncertainty with respect to the macro?
Rajeev Mantri, CFO, Bandhan Bank
As you rightly said, that our DPD pool, SMA 0, 1, 2, put together has been coming down consistently over the last four quarters. And as we stand today, even on YoY, which is almost 50% of what it used to be one year back, that's the good news.
Evasive
High priority
Has there been any conversation with RBI on risk weight increase?
Asked by Mahesh Balasubramanian, Kotak
Avoided confirming or denying discussions with RBI on the risk weight decision.
did not directly answer whether conversation occurreddeflected to other banks' actions
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Question
Given that you have a nomination from RBI right now at the board, has there been any conversation on this topic, on this issue? Because this instance of increasing risk weight seems to be fairly isolated to the bank.
Rajeev Mantri, CFO, Bandhan Bank
The decision was taken before the decision of RBI to put in independent director. Our decision is independent of that, number one. Number two, we wouldn't know exactly what has been the treatment taken by other banks.
Evasive
High priority
Any update on CEO succession?
Asked by Nitin Aggarwal, Motilal Oswal
Refused to disclose status of board submission to RBI.
declined to confirm if names submitteddeferred to future updates
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Question
Firstly, any update on the CEO succession? Has the board submitted the names to the RBI?
Rajeev Mantri, CFO, Bandhan Bank
As I mentioned in my opening remarks, the process is very much on, and it is on track as expected. We will continue to update you on any fresh development that comes from this. As of now, I am not in a position to communicate whether we have sent any names to RBI.
Partial answer
Medium priority
What is the target CD ratio? Any engagement with RBI?
Asked by Nitin Aggarwal, Motilal Oswal
Described trend but avoided giving a target or confirming RBI discussions.
no specific target level givendid not address RBI engagement
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Question
So any particular level you would like to operate at? Any engagement with RBI on this?
Rajeev Mantri, CFO, Bandhan Bank
CD ratio, on a year-on-year basis, I've still seen an improvement from circa 95% to almost 94%. Yes. On a sequential basis, we've seen a bit of an increase. But this is a key focus area.
Answered
Medium priority
Which areas are experiencing stress in SMA 0 and SMA 1?
Asked by Vatsal Shah, Nicestone Capital
Named specific states with stress, providing clear geographic detail.
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Question
Can you just mention which are those areas which are experiences that stress? SMA 0 and SMA 1.
Rajeev Mantri, CFO, Bandhan Bank
In the last quarter, the stress is coming from Punjab and Maharashtra primarily. Though there have been talks of Bihar as well, but Bihar has been doing well across thus far. But definitely, Punjab and Maharashtra are two states which are giving a little bit of a stress.