Bandhan Bank aims for 1.5 percent return on assets by 2027
Bandhan Bank has set clear targets for the 2027 financial year. The bank is aiming for at least 15 percent credit growth. Along with this, management wants to achieve a return on assets (ROA) of 1.5 to 1.6 percent. This follows a period of recovery where the bank focused on stabilizing its portfolio and improving collections.
The bank expects deposit growth to keep pace with credit demand. Management noted that while the industry is facing challenges with deposit mobilization, they are confident in their retail savings strategy. They have already moved away from high-cost bulk deposits to focus on healthier, more stable retail funding.
Improving asset quality and margins
Asset quality has shown a significant improvement in the recent quarter. The bank’s credit costs fell to 2 percent, and they expect this to drop further to around 1.6 percent. Lower slippages and better recoveries have made this organic improvement possible. The bank is also seeing stress levels decline across its various loan buckets.
Net interest margins (NIM) reached 6.2 percent in the last quarter. This recovery is expected to continue through the first half of FY27. Two main factors are driving this: the renewal of old deposits at lower rates and a sharp drop in interest reversals. This combination is helping the bank maintain a steady margin trajectory despite global economic uncertainty.
Diversified portfolio and capital position
Bandhan Bank is continuing its shift toward a more balanced loan book. Secured assets now make up 52 percent of their total loans. The bank is well on its way to reaching its target of 55 percent secured share by 2027. This move helps reduce risk compared to their traditional microfinance focus.
The bank remains in a strong financial position with a capital adequacy ratio of 18 percent. This is well above the regulatory requirement. With a growing wholesale banking portfolio and a disciplined approach to deposit mix, the bank is positioning itself for sustainable growth. Management remains watchful of global risks but is confident in the current domestic recovery.
