Q2 2025 Bandhan Bank Ltd Earnings Call Transcript
Key Points
- Bandhan Bank Ltd (BOM:541153) reported a profit after tax of INR937 crores for Q2 FY25, marking a 30% year-on-year increase.
- The bank's net interest margin (NIM) remained healthy at 7.4%, despite a competitive deposit market and changes in product mix.
- Deposits grew by 27.2% year-on-year, reaching INR1.43 lakh crores, with a stable retail deposit share of 68%.
- The secured book now constitutes 47% of advances, up from 42% in March 2024, reflecting a strategic shift towards more secured lending.
- The bank's transformation program, including intelligent automation and AI adoption, is expected to drive greater efficiency and enhance customer experience.
- Gross NPA increased to 4.7% in Q2 FY25 from 4.2% in the previous quarter, indicating a deterioration in asset quality.
- The microfinance sector continues to face headwinds, with elevated risks impacting portfolio quality and leading to increased slippages.
- Credit costs for the quarter were at 2%, with expectations of elevated slippages and credit costs continuing into Q3 FY25.
- The cost of funds has increased due to a competitive deposit market, impacting the bank's overall cost structure.
- The bank's collection efficiency in the EEB book declined to 98.1% in Q2 FY25 from 98.7% in Q1 FY25, reflecting stress in the microfinance segment.
Ladies and gentlemen, good day, and welcome to Bandhan Bank's Q2 earnings conference call. (Operator Instructions) Please note that this conference is being recorded.
I now hand the conference over to Mr. Vikash Mundhra, Head of Investor Relations. Thank you and over to you, sir.
Thank you, Sagar. 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 September '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'll 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. Ratan Kumar Kesh; Executive Director and Chief Business Officer, Mr. Rajinder Kumar Babbar; Chief Financial Officer, Mr. Rajeev Mantri
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