Bandhan Bank (BANDHANBNK) Q1 24/25 earnings summary

Executive summary

• Leadership transition with the retirement of the founder MD & CEO, appointment of an interim MD & CEO, and ongoing CEO search; Board approved unaudited Q1 FY25 results with no material misstatements.

• Strong macroeconomic backdrop in India, with GDP growth at 8.2% in FY24 and RBI projecting 7.2% for FY25.

• Robust all-round improvement in Q1 FY25, reversing historical Q1 cyclicality, with stable advances, strong deposit growth, and 0.8 million new customers added, reaching 34.4 million.

• Strategic focus on risk-calibrated growth, product and geographic diversification, and digital transformation, with 96% of retail transactions now digital.

• 10th Annual General Meeting scheduled for August 20, 2024, with e-voting and dividend payment arrangements detailed.

Financial highlights

• Gross advances at INR 126,000 crore (₹1,256.2 billion), up 22% YoY and 1% QoQ; deposits at INR 133,000 crore (₹1,332.1 billion), up 23% YoY, with retail deposits stable at 69% of total.

• Net interest income at INR 3,005 crore (₹30.1 billion), up 20.7% YoY and 4.8% QoQ; NIM at 7.6%.

• Net profit at INR 1,063 crore (₹10.6 billion), up 47% YoY; ROA at 2.5%, ROE at 18.8% annualized.

• Operating profit at INR 1,941 crore (₹19.4 billion), up 24% YoY; operating expenses up 21.2% YoY due to investments in people and technology.

• Cost-to-income ratio improved to 45.1% in Q1FY25 from 48.4% in Q4FY24.

Outlook and guidance

• Loan book growth guidance of 18%-20% and deposit growth higher than advances to continue.

• NIM expected to be maintained in the 7%-7.5% range, despite cost of funds pressure.

• Credit cost guidance for FY25 remains at 1.8%-2%.

• Continued focus on increasing secured asset share, further geographic diversification, and digital banking expansion.

• Dividend of ₹1.50 per equity share (15%) for FY24 recommended, subject to shareholder approval at the AGM.