Bandhan Bank (BANDHANBNK) Q2 24/25 earnings summary

Executive summary

• Appointment of Partha Pratim Sengupta as MD & CEO effective November 1, 2024, marking a leadership transition.

• Strong business growth in Q2 FY25, with loans and advances up 21.4% YOY and deposits up 27.2% YOY, led by secured lending.

• Net profit for Q2 FY25 was ₹93,744.50 lakhs, up 30% YOY; ROA at 2.1%, ROE at 16% annualized.

• Continued focus on diversification, digital transformation, and risk management amid industry headwinds.

• Gross NPA ratio at 4.7%, Net NPA at 1.3%, and PCR at 73.5%.

Financial highlights

• Advances grew 21.4% YOY and 4% sequentially to INR 1.31 lakh crore; deposits rose 27.2% YOY and 7% sequentially to INR 1.43 lakh crore.

• Net interest income grew 21% YOY to INR 2,948 crore (₹29.5 bn); NIM at 7.4% in Q2 FY25, up 20 bps YOY.

• Operating profit rose 17% YOY to INR 1,855 crore (₹18.6 bn); operating expenses up 21% YOY due to investments in people and technology.

• Non-interest income grew 10.1% YOY to ₹6.0 bn in Q2FY25.

• Half-year net profit at INR 2,001 crore, up 39% YOY; CRAR at 15.6%.

Outlook and guidance

• Credit cost guidance maintained at 1.8%-2% for FY25, with expectation of elevated slippages in Q3 and improvement in Q4.

• Advances growth targeted at 18% ±1%, with EEB (microfinance) growth expected at 10%-12%.

• NIM guidance remains at 7%-7.5% despite anticipated yield pressure from product mix shift.

• Management highlighted strong digital adoption, with 96% of retail transactions now digital and 88% of savings accounts opened digitally.

• Capital adequacy ratio reduced to 14.34% as of September 30, 2024, due to increased risk weights on certain loan portfolios.