Bandhan Bank - in a sweet spot?

they post it to their youtube channel

I didn’t attend take part in the call, just heard it after they posted it

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mr ghosh sounds optimistic.
interestingly he mentions that for the fist 20 years bandhan had written off only 64 crores.

collections even in the worst hit assam seem to be coming back to above 90%, there will be writebacks resulting in increase in book value

i have been holding bandhan throughout the pandemic and have even averaged down

my basic thesis on bandhan has been that if bajaj finance customers who take loans to buy cellphones and appliances (consumption) pay back their dues due to fear of bad credit bureau report

microfinance customers who actually need loans for business would " in the long run" not deliberately default to avoid a bad credit report

ofcourse this has resulted in opportunity cost for me in the past 2 years.
my calculations on how fast bandhan would recover have been wrong

let’s see how the results pan out

Disclaimer :i am invested in bandhan bank, this is not investment advice, please do your due diligence before investing


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The promoter group led consortium purchaced IDFC mf. I dont think it would lead to any substantial change in the bank since the bank would earn commission on that else MF it sells

Perhaps it would lead to tighter integration of sales if the sales team in directly in touch with the MF but dont see anything else meaningful

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Given that the group has enough liquidity, the purchase is value accretive. For the bank, though, this is an opportunity to boost its fee income through cross-selling of mutual fund products, point out analysts at Jefferies India Pvt Ltd.

If i understand correct, AMC is purchased by holding company and not the bank. How this will boost the fee income of bank?


Since the holding company would favour bank in terms of higher commissions vs others. Hence the bank would now ask employees to sell more of these IDFC funds.

why would they favour and pay “higher” income. Wont the other parties in consortium oppose it?

This is my understanding, generally higher commissions are paid to whosoever can commit to bring in higher amount of business. With Bandhan having skin in the game they should surely commit to bringing higher business and also take higher commissions.

latest edelweiss brokerage report

Disclaimer : i am invested in bandhan bank, this is not investment advice, please do your due diligence before investing


Greta results ! Big beat YOY, QoQ and crushed the estimates ! Net profit 1900 vs 1000 crores estimated. NNPA 1.66% vs 3.01% QoQ.


Q4 earning call recording
Most off the time spent in Q&A is on data understanding

Some emotional statment by Mr gosh which I like…on customer graduation from group borrower to individual customer
"If after giving group loans for 10 to 20 years individual family income is not increasing then I am really not contributing to there life "

After acquisition of gruh my major worry was …they will be able to scale up gruh model in other states

Overall excellent performance in quarter


A few other interesting things were:

  1. The bump in profits were because of utilisation of the provisions. Normalised credit costs going forward will by 2-2.5% and if they undershoot they will add it to the provision buffer
    My guess is normalised earnings for next year will look like 6000 cr, implying the bank is below 10 PE

  2. Claims for the CGFMU will be filed in two parts, this year and next and this years money should flow in in July

  3. Part of the customers have come out of morat in march and the other part will come out in june, meaning the slipages should be evident in Q3 and Q4

  4. The have started giving slightly longer tenure loans, earlier 50:50 1year: 2year and not 40:60

  5. The have taken some rate hikes to protect the NIM’s

  6. Growth next year is expected to be 20-25%

Overall really strong numbers and the bank is going into the next few years with a good buffer and really high CET1

Disc: invested


After listening to the analyst meet of HDFC, it looks they are going very aggressively into loans to agriculture and related activities

While they will not be interested in micro finance, they would be very interested in the individual EEB loan book and SME loan book of bandhan, these are vintage customers with a great track record and all those records will be available with HDFC. And bandhan cannot match the rates that HDFC offers so not today but in a few years we may have a situation where the best bandhan customers get pouched by HDFC. Currently there is a buffer because no other lender is interested in west bengal and assam

Any thoughts?


Question on Expenses.
Looking at screener P&L data, seems in Mar 22 there is a steep increase in expenses - from 6621Cr to 11408Cr

Can anyone point out to me where I can find details of this sudden and high expense?


Disc: Invested over past 2 yrs at various stages

79177dbe-b3a2-476c-ba0e-bb808f9ac89d.pdf (235.3 KB)

Business update for the quarter.
assam floods have resulted in dip in collections

Disclaimer : i am invested in bandhan bank. I am not a sebi registered investment advisor, this is not investment advice. please do your due diligence before investing.


bandhan result

concall transcripts

results were a mixed bag.

important point i understood from the audio recording of the concall (also available on bse site) is that

in the second phase of assam microfinance relief scheme

bank should be getting around 750 to 800 crore from assam govt in this financial year

bank should be getting around 1100 crore in this financial year from the central govt under cgmfu scheme

if these two things happen, stock will definitely get rerated.

overall collections seem to be improving(barring temporary drop due to assam floods) and bank should be in much better shape by the end of current financial year. (no lockdowns)

It’s interesting to note the faith chandrashekhar ghosh has in his customers. He feels most of the delinquent customers will all payback one day.

A lot of customers who are npa do keep paying partially.

housing vertical growth is improving.

If anybody could help me find the latest book value of the bank it would be great.

108rs book value seems to be stuck on screener nd moneycontrol for past 2 quarters

If bandhan bank continues to maintain 5% plus nim (currently 8%) and manages to have microfinance exposure with not more than 5% per state in India(reduces the impact of state govt election waivers)
and overall microfinance portfolio not more than 25% of the total
for the next ten years.
with a overall 20% growth in loan book every year
then it could be rerated massively over the next decade.

Disclaimer : i am invested in bandhan bank, I am not a sebi registered investment advisor. This is not investment advice. Please do your due diligence before investing.


finally online ac opening soon to be launched by the bank

Disclaimer : i am invested in bandhan bank, I am not a sebi registered investment advisor. This is not investment advice. Please do your due diligence before investing.

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Gujarat expansion plan