Intense competition from PSU banks in prime home loans
PSU banks are aggressively pricing home loans, leading to elevated attrition (21-22%) and yield compression. Management acknowledged this as a cyclical feature but expects it to persist.
BAJAJHFL / Q2-FY26 / risks
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Bajaj Housing Finance · Material risks, their source context, and severity in the latest available quarter.
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Material risks this quarter
high
Margin compression may exceed guidance
Analyst questioned whether NIM decline could be sharper than guided 15-20bps. Management did not rule out further compression if competitive pressures intensify or rate cuts accelerate.
Credit cost normalization from non-prime expansion
As the company scales affordable housing and non-prime segments, credit costs could rise from current low levels. Management guided for normalized credit cost of 20-25bps, but actuals may vary.
Assignment income volatility
Management reduced assignment activity due to excess capital, leading to lower fee income. Future assignment levels depend on PBC requirements and ALM needs, creating income uncertainty.