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Informist, Tuesday, Jul. 21, 2026

 

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--Bandhan Bank: Continue to focus on increasing share of secured book 
--CONTEXT: Comments by Bandhan Bank mgmt in post-earnings analyst call 
--Bandhan Bank: Higher funding cost, tech spending risk to profitability 
--Bandhan Bank: See RoA of 1.2-1.4% FY27 on heightened global uncertainties 
--Bandhan Bank: Liquidity position remains comfortable 
--Bandhan Bank: Expect 10-20 bps improvement in other income 
--Bandhan Bank: Opex cost 4.3% end of Q1 vs 4% aim on heightened risks 
--Bandhan Bank: Credit growth remains at par with 14% guidance for FY27 
--Bandhan Bank: Energy crisis risky most to microfin sector, remain watchful 
--Bandhan Bank: 30 bps hit to RoA from NIM compression, 10 bps from high opex
--Bandhan Bank: Aiming for credit cost of 1.6-1.8% in FY27 
 

By Priyasmita Dutta and Sagar Sen

 

NEW DELHI – Bandhan Bank expects its return on assets to average 1.2-1.4% by the end of 2026-27 (Apr-Mar), 40 basis points lower than its aspiration of 1.6-1.8%, its Managing Director and Chief Executive Officer Partha Pratim Sengupta said Tuesday. "I would like to reiterate that this is because of the external factors that we are confronting now," he said at a post-earnings analyst concall. 

 

"Our medium-term strategic objective remains unchanged, and we continue to work towards achieving the guided level of RoA (return on assets). The prevailing external environment may influence the pace at which we get there," he said. "We think the realisation of this aspiration could extend beyond the timeline we had originally envisaged."

 

The Kolkata-based lender's return on assets at the end of June was 1%, 20 bps higher on year but 11 bps lower sequentially. The deviation from the guidance for return on assets is due to external uncertainties leading to higher funding costs and higher-technology related expenses. These have already started impacting profitability, he said. "We remain focused on improving this trajectory through disciplined execution across the business," Sengupta said, adding that the bank "will continue to adapt proactively and leverage all available levers within our control to enhance profitability."

 

The bank reported a near 35% on-year jump in its bottom line to INR 5.02 billion in the June quarter. The private-sector lender's cost of funds during the June quarter was 6.4%, 10 basis points lower than the trailing quarter and 60 bps lower than the corresponding quarter a year ago.

 

The lender is expecting a 30 bps hit to its return on assets from net interest margin compression and a 10 bps pressure from high operating expenditure, the bank's management said. The bank's operating expenditure climbed to 4.3% at the end of the June quarter, up 41 bps from a year ago and 30 bps from the earlier guidance due to heightened risks.

 

Another focus area for the bank is to further bring down the credit cost during the current financial year. "Credit costs continued their downward trajectory and moderated to 1.8% in this quarter compared to 2.0% in the previous quarter... and I am quite hopeful that going forward also the credit cost will come down," Sengupta said.

 

Though the bank's gross advances grew 16% year-on-year to INR 1.56 trillion in the June quarter, the bank expects it to be a tad lower at 14% in FY27. "We continue to increase the share of secured lending in the overall book," Sengupta said. Moreover, he said that the bank will be wary of expanding its microfinance segment, which is vulnerable to energy price shocks. While referring to the ongoing unrest in West Asia, he said, "the greatest impact is the energy crisis, and the sector which gets most affected through this energy crisis is definitely the microfinance sector. So while we want to grow, we are very watchful, and we do not want to hurriedly jump very aggressively... and then burn our fingers."

 

To support its lending operations, the bank will continue to focus on the retail and low-cost current account and savings account, Sengupta said. Total deposits of the bank grew 7% on-year to INR 1.65 trillion in the June quarter. While retail deposits grew by 15.6% to INR 12.20 billion during the period, the current account and savings account ratio increased 234 bps from last year to 29.4%. Sengupta added that the bank's liquidity position remains comfortable.

 

The bank will focus on ramping up capabilities and products so that it can grow its other income. "We are working on multiple aspects to generate more other income. Forex is one part. Earlier, we did not have the whole set of products. We have most of them now, which is generating a lot of flows for us but also bringing other income in terms of fee income. Earlier, we did not have the products, so we were doing vanilla advances," the management said.

 

Tuesday, the bank's shares ended at INR 208.83 on the National Stock Exchange, down 1.2% from the previous close.  End

 

Edited by Saji George Titus

 

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