Bandhan Financial institution has witnessed hardly any impression in Tamil Nadu and Karnataka to this point following the State governments’ actions to control microfinance mortgage recoveries because the financial institution’s microfinance mortgage exposures to the 2 Southern States are “very negligible.”
There are indicators of rising stress in microloan portfolios of microfinance lenders in Tamil Nadu and Karnataka. The Karnataka authorities handed a invoice in February to control the microfinance sector by penalising unregulated MFIs and lenders for his or her coercive mortgage restoration practices.
Following Karnataka, neighbouring Tamil Nadu has additionally launched a invoice to stop coercive mortgage restoration practices. Microfinance business consultants have felt that this form of state legislations are prone to impression credit score self-discipline of debtors and that would impression collections.
Though delinquencies had been excessive in Karnataka and Tamil Nadu, general e book measurement for EEB phase (microfinance) was solely round ₹400 crore in these two States, Bandhan Financial institution stated through the Q4FY25 earnings convention name.
Exposures to Karnataka and Tamil Nadu are restricted at round 1.1 per cent and fewer than 1 per cent, respectively, of the EEB e book.
“In Tamil Nadu, now we have lower than 1 per cent as a proportion of complete advances. And Karnataka is 1.1 per cent. So, each are very negligible and DPD e book can also be very low. The gathering effectivity is round 97 per cent in these two states. So, we’re not that a lot impacted by no matter is occurring in each these states,” the financial institution’s MD & CEO Partha Pratim Sengupta informed analysts through the earnings convention name.
Sengupta emphasised that the brand new rules are usually not relevant for banks. “In each the states the rules are excluded the banks. The banks are usually not part of the rules,” he added.
For the month of March, assortment effectivity for EEB portfolio of the financial institution stood at 96 per cent and 96.5 per cent, for Tamil Nadu and Karnataka, respectively.
Bandhan Financial institution has reported an almost six-fold year-on-year surge in its web revenue at ₹317.90 crore for the fourth quarter final fiscal, as provisions through the interval fell by almost 30 per cent y-o-y.
The Kolkata-based financial institution witnessed the whopping enhance within the web revenue regardless of a 15.29 per cent y-o-y decline in its working revenue at ₹15,57.34 crore through the fourth quarter of FY25.
General assortment effectivity for EEB loans was at 97.8 per cent for Q4FY25, barely increased than 97.4 per cent in Q3FY25.
The lender’s gross NPA ratio rose 87 foundation factors y-o-y to 4.71 per cent, whereas web NPA ratio elevated 17 bps y-o-y at 1.28 per cent within the fourth quarter of final fiscal. Recent slippages through the Q4FY25 rose to round ₹1,744 crore from ₹1,017 crore in Q4FY24.
“Bandhan’s This fall working revenue at Rs 15.7 billion (down 15 per cent y-o-y) was 12 per cent beneath our estimate, led by decrease NII and better opex. PAT at Rs 3.2 billion was round 50 per cent beneath our estimate, led by elevated credit score value. Credit score value stood at 4 per cent (vs our 2.8 per cent estimate) pushed by continued stress within the MFI phase,” Nomura stated in its report on the financial institution’s outcomes.
ICICI Securities, in its report, stated, “Put up the risk-weight rollback by RBI, Tier-1 at Bandhan has jumped to 17.9 per cent, suggesting a powerful capital buffer. We recognize administration’s technique of specializing in secured merchandise to drive progress and structurally decreasing embedded danger within the enterprise. Whereas the financial institution appears nicely positioned on the rate of interest cycle with round 55 per cent increased share of fastened price loans and round 30 per cent share of wholesale TD, continued mortgage combine change in favour of secured loans (round 1000 bps differential) would proceed to weigh on NIM.”
On Friday, Bandhan Financial institution scrip ended the day at ₹161.70 apiece on BSE, down 2.38 per cent from the earlier shut.
Printed on Could 2, 2025
