Bandhan Bank Limited — Q2 FY25
Bandhan Bank reported a mixed Q2 FY25 with PAT of INR 937 crore (+30% YoY) and NIM of 7.4%, but asset quality weakened as gross NPA rose to 4.7% and credit costs hit 2%.
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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.
83%Questions answered0Evaded / deflected12Questions audited
Partial answer
High priority
How should we think about slippages in coming quarters?
Asked by Piran Engineer, CLSA
Management gave slippage and DPD numbers but did not answer the specific question about percentage of overdue customers paying EMIs.
no specific percentage of overdue customers paying EMIsdeferred to next quarter for update
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Question
Firstly, how should we think about slippages in the coming quarters? If you can give us a sense of maybe what percentage of your customers are overdue, but they're still paying their EMIs, or what percentage of your GNPA customers are paying EMIs?
Rajeev Mantri, CFO
I will talk about percentages... we have seen the slippages a little elevated in this quarter itself by 225 crores. What we've also highlighted is the DPD pool... by almost 500 crores. Overall, as we have guided our credit cost... we will be in the range of 1.8% to 2% of credit cost on advances for the full financial year.
Answered
High priority
What percentage of customers are unique to Bandhan?
Asked by Piran Engineer, CLSA
Management provided exact percentages as requested.
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Question
Could you also just share what percentage of your customers are unique to you? How many have, you know, one additional lender, two additional lenders?
Ratan Kumar Kesh, MD and CEO
Bandhan Bank unique is 60%. Bandhan +2, 80%. For us, Bandhan +4 and above is 4.5%.
Answered
Medium priority
What is the 'others' line item in other income?
Asked by Piran Engineer, CLSA
Management explained the components of the 'others' line item clearly.
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Question
On slide 24, you've given the breakup of your other income, and there is this others line item which has doubled, more than doubled YoY. Just want to understand what is that? It is INR 184 crore.
Rajeev Mantri, CFO
This actually includes a portion of income that we have seen from the treasury team, which is basically profit on sale of certain investments and the revaluation gains, which totals to about INR 80 crores... not a sort of a regular feature every quarter, so this can be taken as a one-off.
Partial answer
High priority
Is forward flow rate from SMA to NPL higher this cycle?
Asked by Prabal Gandhi, Ambit Capital
Management discussed collection rates but did not explicitly compare forward flow rates to previous cycles.
did not directly compare forward flow rate to previous cycle
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Question
Some of your peer banks have mentioned that the forward flow rate this time has been quite high compared to the previous cycle. How is your experience on the ground? Meaning if the account is turning into SMA, is the possibility of it becoming NPL has increased compared to the previous cycle?
Vishal Wadhwa, Senior Leader
Overall, if you see whatever elevation we have got on our SMAs, those typically we are able to always collect 50% and above... 50% of that, whatever was got elevated, INR 5,500 crore odd, we typically collect.
Answered
High priority
What is the asset quality in the commercial banking book?
Asked by Prabal Gandhi, Ambit Capital
Management provided specific quality metrics and outlook.
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Question
We are seeing a very, very strong growth in our commercial banking book. Just three to four years back, the NPA in this particular segment was as high as 10%. What is your feedback from the ground on the asset quality in this segment, and how should we look at this going ahead?
Ratan Kumar Kesh, MD and CEO
Our asset quality in commercial book, as of now, is pristine, I would say. In fact, 93%+ is A+ and above, A- and above, so the book quality is exceptionally strong.
Answered
Medium priority
How much of commercial banking is NBFC/MFI/corporate?
Asked by Prabal Gandhi, Ambit Capital
Management gave a specific number.
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Question
How much of that commercial banking would be to NBFC, MFI, corporates?
Ratan Kumar Kesh, MD and CEO
Total, INR 3,000 crore.
Answered
High priority
Would you raise capital given asset quality pain?
Asked by Prabal Gandhi, Ambit Capital
Management clearly stated no need for capital raise in near term.
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Question
Our Tier 1, even if we include profits, it's at 14%, and industry-wide, we are seeing asset quality pain. Would you like to have more capital or say would you be okay slowing down the growth and some of capital?
Ratan Kumar Kesh, MD and CEO
As of now, our growth targets of 18% ± 1, with more secured buyers, will continue to happen... we are fairly comfortable at 15.6%. Having said that, we will continue to watch this space... for the next four quarters, we don't see any need for us to do that.
Partial answer
High priority
How do you view MFI disbursement going forward?
Asked by Jai Mundhra, ICICI Securities
Management gave qualitative stance but no quantitative near-term guidance.
no specific growth guidance for MFI in near term
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Question
How do you look at the disbursement in MFI going forward? I mean, it has been coming down... as we go into October and festive season, how do you look at the disbursement in the MFI in the near term?
Ratan Kumar Kesh, MD and CEO
We have decided to be a bit more secure... quarter two, purposely, we have decided to be a bit more watchful and careful... we would like to maintain similar watchful, cautious posture in quarter three as well.
Answered
Medium priority
Is there a difference in individual vs group delinquency in MFI?
Asked by Jai Mundhra, ICICI Securities
Management directly answered the comparison.
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Question
If I look at the slippages for this quarter for MFI, that you mentioned at around 700+, which turns out to be around 5% on an annualized basis, is there any difference in individual and group delinquency?
Ratan Kumar Kesh, MD and CEO
While both are operating in the similar band, but clearly, individual is doing better than the group at this stage for us.
Partial answer
High priority
Why have NIMs held up despite MFI mix decline?
Asked by Nitin Aggarwal, Motilal Oswal
Management gave yield differential but did not reconcile the mix change impact on NIM.
did not fully explain the math behind NIM resilience
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Question
If I see, like there is a 400 basis point drop in mix of MFI and CD ratio has also declined sharply, but margins have been very resilient and dropped just 20 basis point. So just explain this math, actually.
Rajeev Mantri, CFO
The yield difference is roughly around 10% between the EEB book and the overall secured portfolio books.
Answered
High priority
How much of the book has gone through new underwriting standards?
Asked by Prakhar Sharma, Jefferies
Management provided specific amount of book under old regime.
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Question
You had made material changes to your underwriting policies, re-introducing the cooling-off period... So can you discuss, you know, how much of your book is actually gone through this change of underwriting standards?
Ratan Kumar Kesh, MD and CEO
Out of the total 60,000-odd crores, round about, book that we have, 3,000 crores will be pre-April 2023 regime, when we started putting those cooling period guardrails.
Answered
High priority
What credit cost assumption for EEB in guidance?
Asked by Abhishek Murarka, HSBC
Management gave a specific percentage.
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Question
Your credit cost guidance for the year, how much have you assumed for EEB or MFI, basically?
Rajeev Mantri, CFO
Around 3%+.