Risks
4 risks
Risk Intelligence
Elevated MFI stress persists
View Risks →Bandhan Bank Limited — Q4 FY25
Bandhan Bank's Q4 FY25 PAT of INR 318 crore (vs INR 55 crore last year) was aided by low base and tax credits, but core operating performance weakened.
neutral
medium
Financial stats pending filing verification
2-Minute Summary
✦ AI-Generated from Full Transcript
Bandhan Bank's Q4 FY25 PAT of INR 318 crore (vs INR 55 crore last year) was aided by low base and tax credits, but core operating performance weakened. NII declined 4% YoY to INR 2,756 crore as NIM compressed to 6.7% (down 20bps QoQ) due to secured mix shift and elevated slippages. Credit costs remained high at 3.9% of advances, though down from 4.1% QoQ. The EEB book saw slippages of INR 1,349 crore, but collection efficiency improved to 97.8%. Management guided for 15-17% advances growth over 3 years, targeting secured mix >55% by FY27, and credit costs of 1.5-1.6% over 2-3 years. Near-term headwinds persist from MFI stress and investment costs, with ROA expected to trough in H1 FY26 before recovering. Key risk: slower-than-expected improvement in MFI asset quality could delay profitability recovery.
बंधन बैंक का चौथी तिमाही का मुनाफा 318 करोड़ रुपये रहा, जो पिछले साल के 55 करोड़ से काफी ज्यादा है। यह बढ़ोतरी पिछले साल के कम आधार और टैक्स छूट की वजह से हुई, लेकिन असली कमाई कमजोर रही। ब्याज से होने वाली आय 4% घटकर 2,756 करोड़ रुपये रह गई। ब्याज दर का फायदा 6.7% पर आ गया, जो पिछली तिमाही से 0.20% कम है। इसकी वजह सुरक्षित कर्जों की ओर बढ़ना और ज्यादा खराब कर्ज हैं। खराब कर्ज का खर्च 3.9% रहा, जो पिछली तिमाही से थोड़ा कम है। छोटे कर्जों में 1,349 करोड़ रुपये के खराब कर्ज आए, लेकिन वसूली दर 97.8% हो गई। बैंक ने अगले 3 साल में कर्ज 15-17% बढ़ाने, सुरक्षित कर्ज 55% से ज्यादा करने और खराब कर्ज का खर्च 1.5-1.6% तक लाने का लक्ष्य रखा है। फिलहाल छोटे कर्जों में दिक्कतें हैं, इसलिए मुनाफा अगले साल की पहली छमाही में सुधरेगा।
Risks4 trackedTranscriptfull text
Research workspace
Focused Modules
Transcript
Full text
Call Transcript
Full transcript text is available on this route.
Read Transcript →Quarter Snapshot
Secured Book Share
50.5%
+8.5pp YoY
Secured advances grew 32% YoY, now over half of total advances, reflecting diversification strategy.
EEB Collection Efficiency (March)
98.2%
+70bps QoQ
Improved from 97.5% in Dec 2024, indicating gradual stabilization in microfinance portfolio.
Retail Term Deposit Growth
30%
+30% YoY
Strong growth in granular deposits, reducing reliance on bulk deposits to 31% of total.
EEB DPD Pool (SMA 0-2)
INR 1,895 crore
-10.5% QoQ
Absolute reduction of INR 223 crore QoQ, now 3.4% of EEB advances vs 3.8% in Q3.
What Changed vs Last Quarter
NEW
Advances growth of 15-17% over next 3 years
Targeting 15-17% year-over-year advances growth, with secured mix exceeding 55% by FY27.
NEW
ROA target of 1.8-1.9% over 2-3 years
Aiming for return on assets of 1.8-1.9% over the next 2-3 years, driven by better asset quality and operating leverage.
NEW
OpEx to asset ratio to increase 10-20bps over 2 years
Operating expenses to average assets ratio expected to rise by 10-20 basis points from current levels over the next two years due to investments.
UPDATED
Credit cost target of 1.5-1.6% over 2-3 years
Expect credit costs to improve from current elevated levels to 1.5-1.6% on a full-year basis over the next 2-3 years.
DROPPED
Secured mix target of 55%+ by FY27
Management aims to increase secured advances share from 49% to over 55% by FY27, with secured book growing 3x faster than EEB.
DROPPED
NIM to moderate further
CEO stated NIM will continue to moderate as the bank shifts to secured assets, but ROA target remains near 2% through volume growth and cost control.
DROPPED
EEB disbursements to be calibrated in Q4
Management indicated Q4 EEB disbursements will be moderated versus prior year, with focus on renewals for good-quality borrowers.
NEW RISK
Elevated MFI stress persists
Credit costs remain high at 3.9% due to continued stress in microfinance; management expects H1 FY26 to be challenging.
NEW RISK
Regional concentration in West Bengal
West Bengal accounts for 23% of advances and 40% of deposits; localized disruptions (e.g., Murshidabad) could impact collections.
NEW RISK
Recent vintages show higher NPAs
Analyst noted that loans disbursed in FY24 have NPA rates of 3.5-4%, raising concerns about underwriting quality.
RISK GONE
Elevated MFI slippages may persist
Despite SMA 0 improvement, SMA 1+2 buckets increased, and management expects Q4 slippages to remain substantial (though lower than Q3).
RISK GONE
Karnataka MFI ordinance impact
Analyst raised concern about potential Karnataka legislation; management downplayed risk given small exposure (INR 740 crore), but uncertainty remains.
RISK GONE
OpEx growth outpacing income growth
Adjusted OpEx grew 23% YoY, higher than NII growth of 12%, driven by technology investments and branch expansion, which may weigh on near-term efficiency.
🤫 Topics management stopped discussing
Mentioned in Q1 FY24, Q1 FY25, Q2 FY24, Q4 FY24
Management expects overall loan book growth of 18-20% for FY25, with secured book growing faster than EEB.
Mentioned in Q1 FY25, Q2 FY24, Q2 FY25
Management expects full-year credit cost to remain within 1.8%-2% of advances, with Q3 potentially elevated but Q4 showing improvement.
Mentioned in Q1 FY25, Q2 FY25
Tier 1 ratio (including H1 profits) at ~14% is adequate for now, but rapid secured book growth and elevated credit costs could necessitate capital raise if stress persists.
Mentioned in Q1 FY25, Q4 FY24
The bank is operating with an interim MD&CEO; the board has not yet submitted names to RBI, creating leadership uncertainty.
Mentioned in Q3 FY24, Q4 FY24
The pending CGFMU audit may not yield the expected positive result, potentially impacting recoveries and capital.
Fast read
Guidance and risk preview
Targeting 15-17% year-over-year advances growth, with secured mix exceeding 55% by FY27.
Credit costs remain high at 3.9% due to continued stress in microfinance; management expects H1 FY26 to be challenging.
View Risks →