Bandhan Bank will continue posting a 35%-40% compound annual growth rate (CAGR) in assets in the current financial year as it sees pent-up demand coming from all loan verticals post a two-year lull in credit-off take, the bank’s Managing Director and Chief Executive Officer Chandra Shekhar Ghosh told Moneycontrol on May 13.
The private sector bank on May 13 posted a net profit of Rs 1,902.3 crore for the quarter ended March, up manifolds on a yearly basis, on account of the higher net interest income (NII) and stable asset quality. Its total advances stood at Rs 99,338.1 crore as of March end, up 14.1% on-year.
Ghosh said during the last two years, the bank has been building an internal team and this year it is developing an IT system that fits every product that customer demands.
“Focus will be on retail because we are a retail bank. Gold loans, personal loans, two-wheeler loans, these are the major products and needs of the public in the ground level other than microfinance,” Ghosh said.“Housing loan is also in very good demand and we will be continuing with whatever growth we saw in the last quarter,” Ghosh added.
On the liabilities side, Bandhan Bank saw its low-cost current account and savings account deposits ratio fall to 41.6% as of March end as compared to 43.4% a year ago and 45.6% a quarter ago. When asked about the reason for the dip, Ghosh said that the bank has from the beginning been performing well in retail deposit and CASA and that there is “no doubt” about that.
“But in this quarter, the credit demand that has come is exceptionally different so for that we have raised some bulk deposits. For that reason, CASA is showing a bit of reduction,” the CEO said. “CASA continuing at 45% is good enough and we can depend on that,” Ghosh added.
As of March end, the bank’s total deposits stood at Rs 96,330.6 crore, up 23.5% on-year.
Delay in diversification
Even as Bandhan Bank has managed to post a manifold rise in its Q4FY22 bottomline, the lender on Friday said it has delayed its diversification plan that is aimed at lowering the bank’s microfinance loans portfolio to 26%.
“Last year our micro credit was at 60%, now it stands at 47%. Housing loan, which was at 23%, has increased to 24%, commercial banking was at 16%, has risen to 28% and retail has increased to 1.6% from 1.3% earlier. So overall, we feel that our micro-credit loan is gradually coming down as a proportion of total advances and by 2025, we can reach 26% micro credit loans in total assets,” Ghosh told reporters during a post-earnings conference.
Bandhan Bank’s Board has approved adding 550 branches in this fiscal, Ghosh said, adding that 80% of these branches will be in regions other than East for Bandhan Bank to achieve its geographical diversification goal.