Bandhan Bank Reshapes Loan Portfolio, Reducing EEB Exposure to 35%

Image Source : The Financial Express

Bandhan Bank has announced a strategic restructuring of its loan book, aiming to reduce its reliance on unsecured microfinance loans under the Emerging Entrepreneurs Business (EEB) segment. Over the next two to three years, the bank plans to bring down the EEB loan share from 42% to 35%, shifting focus toward secured lending.

The move is expected to lower the bank’s net interest margin by approximately 50 basis points, bringing it down to 6.1-6.2% from the previous 6.7%. Despite this adjustment, Bandhan Bank remains optimistic about maintaining a steady credit growth rate of 15-17% during the transition period.

Managing Director and CEO Partha Pratim Sengupta emphasized that the restructuring aims to ease stress in the EEB segment while strengthening the bank’s overall financial stability. He noted that the secured loan portfolio, currently at 42%, will see further expansion as part of the bank’s long-term strategy.

Bandhan Bank recently reported a significant rise in net profit for the March quarter, reaching Rs 318 crore—more than five times the Rs 55 crore recorded in the same period last year. The increase was driven by lower provisions, despite a slight decline in net interest income.

As the bank continues to innovate its product portfolio, the restructuring is expected to enhance risk management and improve asset quality, positioning Bandhan Bank for sustainable growth in the coming years.

Key Highlights:
- Bandhan Bank plans to reduce EEB loan share from 42% to 35% within two to three years.
- The move will lower net interest margin by around 50 basis points.
- Expected credit growth rate remains steady at 15-17% during the transition.
- Secured loan portfolio to expand as part of long-term stability efforts.
- Net profit for March quarter jumps to Rs 318 crore, driven by lower provisions.
- Restructuring aims to improve asset quality and risk management strategies.

Sources: Economic Times, The Week, Business Standard.