Bandhan Bank Limited

Partha Pratim Sengupta

MD AND CEO, BANDHAN BANK LIMITED

Ratan Kumar

EXECUTIVE DIRECTOR AND CHIEF OPERATING OFFICER, BANDHAN BANK LIMITED

Rajinder Kumar Babbar

EXECUTIVE DIRECTOR & CHIEF BUSINESS OFFICER, BANDHAN BANK LIMITED

Rajeev Mantri

CHIEF FINANCIAL OFFICER, BANDHAN BANK LIMITED

Vikash Mundhra

HEAD OF INVESTOR RELATIONS, BANDHAN BANK LIMITED

55%

to build a strong MSME book as it has a huge potential. We endeavored to achieve a secured mix of 55% plus by FY27. Growth in EEB book will also continue albeit at a relatively lower pace.

rs,

nue albeit at a relatively lower pace. Risk, Governance and Compliance: As carrier bankers, we understand the importance of risk and compliance. We are committed to embedding risk management

Rs. 1.32 lakh crore

and our growth in deposits exceeds the growth in advances. In this quarter, advances book was at Rs. 1.32 lakh crore with a Y-to-Y growth of 14%. On the deposits side, deposits stands at Rs. 1.41 lakh crore with a

14%

in advances. In this quarter, advances book was at Rs. 1.32 lakh crore with a Y-to-Y growth of 14%. On the deposits side, deposits stands at Rs. 1.41 lakh crore with a Y-to-Y growth of 20%, which

Rs. 1.41 lakh crore

was at Rs. 1.32 lakh crore with a Y-to-Y growth of 14%. On the deposits side, deposits stands at Rs. 1.41 lakh crore with a Y-to-Y growth of 20%, which is higher than the advances growth. The degrowth over the la

20%

owth of 14%. On the deposits side, deposits stands at Rs. 1.41 lakh crore with a Y-to-Y growth of 20%, which is higher than the advances growth. The degrowth over the last quarter in deposits is la

69%

aken as a strategic decision. Our share of retail deposits, CASA plus retail term deposits is now 69%. CASA deposits grew 6% Y-to-Y with CASA share of nearly 32%. We are making steady progr

6%

sion. Our share of retail deposits, CASA plus retail term deposits is now 69%. CASA deposits grew 6% Y-to-Y with CASA share of nearly 32%. We are making steady progress on our diversificat

32%

CASA plus retail term deposits is now 69%. CASA deposits grew 6% Y-to-Y with CASA share of nearly 32%. We are making steady progress on our diversification agenda, whereby in this quarter,

34%

ogress on our diversification agenda, whereby in this quarter, we have grown our secured books by 34% Y-o-Y improving the secured mix further to 49%. As we look ahead, we will continue with further d

49%

n this quarter, we have grown our secured books by 34% Y-o-Y improving the secured mix further to 49%. As we look ahead, we will continue with further diversification on the asset book, through faste

6.9%

assets impacted yields, and together with higher slippages led to the moderation of the yields to 6.9% in Q3FY25. However, on a 9MFY25 basis, NIM still remains healthy and stable at 7.3%. Net total

“We will be happy to provide you with any clarity if required from the current quarter numbers and the way forward.”

“It is my privilege to lead Bandhan Bank, and I am confident that together with my team we will be committed to the execution of the Bandhan 2.0 Strategy”

“As you may be aware, we have onboarded talent in the various verticals from the best institutions in banking, both private and public sector banks and together with them, I'm confident that we will achieve the goal we have set for ourselves.”

“The dedicated transformation management team will be essential for driving innovation, improving operational efficiency, and ensuring the institution adapts the fast-paced changes in technology, regulations, and customer expectations.”

“Additionally, the transformation team will be tasked to foster a culture of compliance, agility, and continuous improvement.”

“The Transformation Management Office comprises a cross-functional team which will report to the Transformation Apex Committee which will be chaired by me.”

“We will be endeavoring to drive deposit growth higher than the advances growth to ensure long-term sustainability.”

“We endeavored to achieve a secured mix of 55% plus by FY27.”

“As a result, with an increased share of secured advances, we would expect the NIMs to moderate in future to reflect the underlying risk without losing focus on the need to achieve our return on assets.”

“While currently, credit costs are a bit elevated, we stand by our endeavor to target lower credit costs over the next few quarters.”

Rajeev Mantri

14

Moderator

9

Vatsal Shah

7

Hardik Shah

6

Vikash Mundhra

3

Roshini

3

Vinayak Agrawal

3

Puneet

3

Vishal Wadhwa

2

Let me start by giving a brief on my background

1

Vikash Mundhra

Thank you, Sejal. Good evening, everyone, and a warm welcome to all the participants. It's our pleasure to welcome you all to discuss Bandhan Bank's “Business and Financial Performance” for the Quarter Ending December ‘24. We appreciate your time and participation today. We will take this opportunity to provide insight into our operational activities, including any significant achievements or challenges. We will also touch on market conditions, strategic initiatives, and any changes in our business environment. To discuss all this in details, we have with us our MD and CEO – Mr. Partha Pratim Sengupta; Executive Director and Chief Operating Officer – Mr. Ratan Kumar; Executive Director & Chief Business Officer – Mr. Rajinder Kumar Babbar; Chief Financial Officer – Mr. Rajeev Mantri and myself Vikash Mundra – Head of Investor Relations along with other Senior Management Team of the Bank. We will be happy to provide you with any clarity if required from the current quarter numbers and th

Let me start by giving a brief on my background

I have been a probationary officer in State Bank of India and have been groomed in various fields both in retail and corporate and I rose up to the level of Deputy Managing Director and the Chief Credit Officer of the Bank. From there, I was appointed as the Managing Director and Chief Executive Officer of Indian Overseas Bank. And now I have been appointed as the MD and CEO of Bandhan Bank. I'm proud of the team at Bandhan. We have the talent and the experience to deliver. As you may be aware, we have onboarded talent in the various verticals from the best institutions in banking, both private and public sector banks and together with them, I'm confident that we will achieve the goal we have set for ourselves. Needless to add, the success of any organization depends on its people and I'm proud to say that in my experience over the last three months, I have seen a team which has the passion, commitment and the zeal to deliver. Since the time I have been here, I have undertaken some few

Rajeev Mantri

Thank you, Partha sir. And welcome everyone to the Earnings Call. Before I deep dive into the business numbers, let me begin highlighting the few one-offs that we had during the quarter. In the non interest income we had two one offs which had a positive impact on our overall P&L. Firstly, we received the claim payout from CGFMU stands for credit guarantee funds for micro units and the total income booked on account of the same is Rs. 538 crores. Second, we received a net amount of Rs. 52 crores against microfinance loans from the Assam government under the Assam Relief Scheme. In the provision line item, we had two one-offs. First, we did a technical write-off of Rs. 1,266 crores in the EEB portfolio, as a result of which an incremental provision of Rs. 336 crores was made during the quarter. Second, there is a provision of Rs. 30 crores relating to non-banking assets which also was done during the quarter. The last one off was relating to the staff expenses wherein we had a one off o

I will move over to liabilities

As of December 31, 2024, total deposits stood at Rs. 1.41 lakh crore as against Rs. 1.17 lakh crore in the previous year, same quarter, a growth of 20% Y-o-Y, which is higher than our advance growth. The Bank continues to focus on granular and stable retail deposits. The total retail deposit, which is CASA, plus retail term deposits grew by 16% year-on-year of which the growth in the retail term deposits was higher at 26% year-on-year. CASA deposit stood at Rs. 44,735 crore which increased by 6% year-on-year. The growth is on the softer side but it is largely in line with the industry trend we see on CASA. Within CASA, savings accounts have grown by 8% year-on-year and the Bank continues to focus on building relationships across its customer base, strengthen its value proposition and garner new customers. The CASA ratio stands at 32%. Though the share of CASA has declined on sequential basis, we have witnessed strong growth of 6% quarter-on-quarter in the retail term deposits leading t

I will move on to collections and asset quality

The Bank's overall collection efficiency, excluding NPA, in Q3FY25 was marginally lower at 97.6% as compared to 98.2% in Q2FY25. For the EEB book, the collection efficiency (excluding NPA) in this quarter declined to 97.4% vs. 98.1% in the previous quarter reflecting the stress in MFI segment. Collection efficiency for the non-EEB book also declined to 98.3% in Q3FY25 vs. 98.7% in Q2FY25. I would however mention that the collection efficiency in West Bengal and Assam have largely remained stable at 98.8% and 99.2% respectively over the last couple of quarters. We have however seen some deterioration in the rest of India in the book from a collection efficiency perspective from 97.2% in Q2FY25 to 96.3% in Q3FY25. On the asset quality front, the Bank has seen incremental stress this quarter higher than expectations. The gross slippages for this quarter was Rs.1,621 crores. The increase was primarily in the EEB book, where it increased to Rs.1,196 crores as compared to Rs.752 crores in th

I will move to profitability

Coming to the Quarterly P&L, NII at Rs. 2,830 crores grew by 12% year-on-year. Sequentially, there was a decline of 4% and that's primarily on account of the change in product mix towards higher secured and the impact of higher slippages. Our net interest margin (NIM) for the quarter was 6.9% compared to 7.4% in the previous quarter. The sequential decline of 50 basis points in NIM is primarily contributed by the impact of the change in advances mix towards more secured as well as the higher slippages, as I mentioned. On a nine month basis, NIM was stable at 7.3%, which is within our guided range of 7% to 7.5% for this financial year. Our net total income in Q3FY25 was Rs. 3,926 crores, an increase of 28% year-on-year. This includes the one-off gain of Rs. 538 crores on account of CGFMU payout and net Rs. 52 crores received from the Assam government as we highlighted earlier. Operating expenses grew by 35% Y-o-Y. However, if we net out the impact of the ESOP accounting change of Rs. 16