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Bandhan Bank Q4FY21 Conference Call Highlights

Bandhan Bank Q4FY21 Conference Call Highlights

Published on 02 June 2021|
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Asset Quality:

  • 72% of EEB NPA customers, who are currently servicing either in part or full, are expected to become regular in the future.
  • The bank does not see these NPAs as a risk. Usually, if a customer is paying 70%, he is not considered risky.
  • In March’21, collection efficiency in West Bengal stood at 98.3% (in value terms) and 99% (in volume terms). For Assam, the same was 94% (in value terms) and 83% (in volume terms). There has been a drop of 3- 4% in April’21 CE. For WB, the drop has been less than 3%.
  • 50% of the restructured housing assets are from the self-employed segment.
  • The bank has indicated that it would like to maintain higher provisioning buffers going forward.
  • Rs3.3 bn worth of ECLGS loans have been classified as NPAs as the primary accounts of these borrowers have been tagged as NPAs.
  • Movement of GNPAs is as follows: For 4QFY21:  Gross slippages: Rs21.97bn,  Recoveries & upgrades: Rs0.23bn, Write-off: Rs19.29bn.

Loans:

  • Disbursals are now at ~95% of pre-covid levels and new customer addition is close to pre-covid levels.
  • ECLGS loans were given due to customers’ requests and govt’s push in 3QFY21. Of the total ECLGS loans, 53% was to WB and 20% to Assam.
  • The housing segment is expected to pick up going forward. Housing portfolio (excluding construction finance) with ATS>Rs10mn constitutes.

Liabilities:

  • Interest reversal was higher due to the accumulation of slippages over the last 12 months. Going forward, interest reversals would be lower.
  • The average cost of SA stands at 5.15%. 6% interest offered on SA may decline going forward.

Balance Sheet:

  • Total ECLGS disbursements stand at ~INR18b in the MFI portfolio and another ~INR1b in Small Enterprise Loans. These disbursements were made in 3QFY21; nil disbursements were reported in 4QFY21. Furthermore, ~53% of ECLGS disbursements were made in West Bengal and 20% in Assam.
  • Another income breakup: PSLC’s fee income – INR3.24b, third-party distribution fees – ~INR0.8b, and the remainder being predominantly loan processing fees. n The active borrower base increased by 1m in 4Q
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