Thank you, Rayan. Good evening, everyone, and welcome to Bandhan Bank's earnings call to discuss our business and financial performance for the quarter and full year ended 31st March 2026.

Thank you for joining us today. We truly appreciate your time and participation.

During today's call, we will walk you through our operating performance, key developments during the period, and our strategic priorities going ahead, along with our view on the operating environment. Joining us this evening are Mr.

Partha Pratim Sengupta, Managing Director and CEO; Mr. Ratan Kumar Kesh, Executive Director and Chief Operating Officer; Mr.

Rajinder Kumar Babbar, Executive Director and Chief Business Officer; Mr. Rajeev Mantri, Chief Financial Officer; and other members of the senior management team.

I'm Vikash Mundhra, Head of Investor Relations. Following the management's remarks, we will be happy to take your questions on the quarter's performance and our outlook.

With that, I would now invite our Managing Director and CEO, Mr. Partha sir, to share his opening comments.

Over to you, sir.

Thank you, Vikash. Good evening, everyone, and thank you for joining us today.

On behalf of Bandhan Bank, I am pleased to welcome you to our earnings call to discuss the financial performance for the fourth quarter and full year of FY '26. We appreciate your continued trust on us.

This has been an important and challenging year for the bank, and we look forward to sharing our perspectives on the quarter, the evolving operating environment, and our priorities going forward. This quarter marked an improvement across many key parameters, reflecting strengthening fundamentals across our core businesses.

We saw encouraging momentum build through the quarter, underpinned by disciplined execution and a sharp focus on balance sheet quality. On the asset side, advances continued to grow at a healthy space.

The EEB segment has not only stabilized, but also delivered good sequential growth, reinforcing our confidence in the portfolio. At the same time, our secured book continued strong growth trajectory and adding resilience to the overall loan portfolio.

On the liability side, we made meaningful progress in improving the quality and granularity of our deposits. CASA growth was strong during the quarter, and retail deposit mobilization continued to grow at an elevated trajectory.

In parallel, we consciously reduced the share of high-cost bulk deposits, which has helped strengthen the liability profile and improve granularity going forward. These actions are reflecting in our profitability metrics as well.

Margins showed an encouraging upward trend during the quarter, supported by the sustained reduction in the cost of funds. Fee income also saw a healthy pickup, led by the strong growth in recurring and predictable streams, such as processing fees and third-party products income, further enhancing the stability of our revenue profile.

Asset quality trends during the quarter were constructive. We saw not only a decline in slippages on a sequential basis, but also a meaningful improvement across SMA buckets.

This reflects improving portfolio behavior and the effectiveness of our early warning and monitoring mechanisms and improved collection efficiency. While the progress this quarter has been encouraging, we remain clear on the areas where we are sharpening our focus further.

Granular deposit growth, including CASA, continues to be a key priority, and we are intensifying efforts to deepen customer engagement, create digital journeys, and enhance product propositions to further strengthen our liability franchise. Operating expenses were elevated during the quarter due to some non-recurring items, and we remain focused on driving tighter cost discipline and improving operating leverage over the coming periods.

Additionally, even as slippages and SMA trends improve, we continue to place strong emphasis on recovery efforts, limiting incremental stress, and moving steadily towards our medium-term credit cost aspirations. This remains a core area of management focus.

Overall, the quarter reflects improving fundamentals, strengthening business momentum, and continued balance sheet resilience. We believe the actions we are taking today will position the bank well for sustainable, profitable growth over the medium term.

While my colleague and CFO, Mr. Rajeev Mantri, will shortly walk you through the financials in detail, I would like to highlight a few key performance indicators from the fourth quarter of FY '26.

At the end of FY '26, our gross advances stood close to ₹1.54 lakh crore, delivering a healthy 13% YoY growth. Deposit balances scaled up to ₹1.66 lakh crore, supported by strong traction in retail and CASA deposit, reflecting our strategy of strengthening the quality and sustainability of our liabilities.

Retail term deposits continued to scale up at a strong pace, recording growth of over 30% YoY, reflecting growing customer confidence and the effectiveness of our branch-centric distribution strategy. CASA balances strengthened sequentially and now account for 29% of total deposits.

Consequently, the overall retail deposit composition, including CASA and retail term deposits, improved further to 74%, reinforcing the stability and granularity of our deposit base. Our focus on optimizing the composition of the loan book continued, with the share of secured lending remaining largely stable over the quarters.

The pace of growth of secured book over the last year has been strong, enabling us to achieve our targeted portfolio alignment earlier than planned. We expect to sustain the current mix in the near- to medium-term with gradual increase.

The quarter saw healthy margin expansion, with NIMs improving sequentially to 6.2% as funding costs softened. Credit costs continued their downward trajectory, and asset quality metrics strengthened, with gross and net NPA at 3.3% and 1% respectively, and provision coverage at 85%, including technical write-offs.

For Q4 '26, our net total income stood at ₹3,566 crore, while our operating profit was ₹1,441 crore. I am pleased to inform the bank reported a PAT of ₹534 crore for the quarter, depicting a growth of 68% YoY.

Our capital position remains robust. The capital adequacy ratio improved and stands at 18% and Tier 1 capital at 17.3%.

This provides ample headroom to support the future growth. We also continue to expand our distribution footprint, taking the branch network to 1,955 branches.

During the year, apart from adding new branches, we have upgraded most of our housing finance centers to full-fledged banking branches, and some of them also got merged with the existing branches. Further, we also have 4,400 EEB banking units spread across the country.

This expansion and reach enhances and further strengthens our ability to serve customers more effectively. Furthermore, I am pleased to inform you that the Board of Directors has recommended a dividend of ₹1.50 per share, subject to the approval of the shareholders at the forthcoming Annual General Meeting.

To conclude, the performance this quarter reflects the tangible progress we have made across growth, profitability, asset quality, and balance sheet strength. The improvement we are seeing is broad-based and driven by a clear strategic direction, disciplined execution, and a sustained focus on building a resilient and sustainable franchise.

While we remain mindful of the external environment and are assessing its implications, our priorities remain unchanged: strengthening our core businesses, improving the quality of growth, driving efficiency, and consistently enhancing shareholders' value. With a strong capital position, improving fundamentals, and a clear roadmap ahead, we believe Bandhan Bank is well positioned to deliver steady and sustainable performance going forward.

With that, I would now like to hand over the call to our Chief Financial Officer, Shri Rajeev Mantri, who will take you through the financial performance in greater details. After that, we will be happy to take your questions.

Thank you.

Thank you, Partha sir, and a warm welcome to everyone on the call. We'll begin by reviewing the bank's operating performance for the quarter.

I will briefly cover the key financial highlights along with it. We'll also discuss our business progress over the period.

We'll start with the advances portfolio, where the development this quarter underscores the steady headway we are making in repositioning and strengthening the balance sheet. As of 31st March 2026, the loan book stood at ₹1.54 lakh crore, delivering 13% year-on-year growth and a healthy 6% sequential expansion, supported by momentum across all major businesses.

The EEB portfolio, at ₹53,906 crore, remains lower on a yearly comparison, which was an industry-wide phenomenon, but it posted a strong sequential growth of 8% during the quarter. Growth in the non-EEB segments remained robust, with the portfolio expanding 25% year-on-year.

This book represents close to two-thirds of total advances, reflecting continued progress in portfolio diversification. Within this, retail assets recorded strong growth of 46% year-on-year, driven largely by secured products such as commercial vehicles, construction equipments, auto loans, and gold loans.

Wholesale banking also delivered solid expansion of 33% year-on-year, aided by deeper client engagement and disciplined execution. Secured book grew 25% year-on-year and now forms nearly 56% of the overall portfolio, supporting further improvement in the asset quality and risk resilience.

Overall, the advance mix is more balanced and deconcentrated, with no single segment dominating the book: EEB group lending accounts for 23% of advances, small business and agri loans at 12%, wholesale banking 31%, housing 23%, and retail loans nearly 11% of total advances. Turning to liabilities, the total deposits stood at ₹1.66 lakh crore as of 31st March 2026, reflecting a 10% increase over last year and a sequential growth of 6% compared to the previous quarter, which was broadly tracking the expansion in advances.

Growth was consciously moderated as we focus on strengthening retail-led deposits without tapping incremental bulk funding. A key highlight has been the continued moderation of bulk deposits, which declined 7% year-on-year.

Share of bulk deposits now stands at about 26% of total deposits, down from 31% last year, reflecting a clear and deliberate move away from higher-cost, less stable funding sources towards a more resilient and granular liability structure. Within our bulk deposit base, it is also important to highlight that around 89% of these deposits are non-callable in nature.

This provides meaningful visibility and stability to our funding profile. Our retail deposit franchise continues to scale well.

Retail balances, including CASA and retail term deposits, grew 18% year-on-year. Retail term deposits in particular showed strong traction with 30% year-on-year growth, underscoring customer confidence and deeper engagement with the franchise.

On CASA, balances increased to ₹48,752 crore, delivering strong 14.1% sequential growth, driven largely by sharp pickup in the current accounts. Savings balances also moved up 7% during the quarter.

As a result, the CASA ratio improved to 29.3%, up by nearly 200 basis points quarter-on-quarter. Let me now turn to asset quality, where we continue to see consistent improvement across the key parameters, reflecting better portfolio behavior and disciplined execution.

Starting with collections, performance strengthened further during the quarter. Overall collection efficiency, excluding NPA, improved to 98.9% in March 2026, up from 98.1% in December 2025.

Within the EEB portfolio, collections remained strong, with quarter-wide efficiency at 99.3% versus 98.2% in Q3 FY '26. For the month of March specifically, it was 98.6%, up from 98% in December.

This represents the collection efficiency ex-NPA. Additional details for this is available in slide 22 of our investor deck.

If we talk about the collection efficiency X bucket, that reflects even a better trajectory. It used to be at 99.3% in quarter three, has improved to 99.6% for quarter four, and in fact for the month of March it was at 99.7%.

Improvements are equally evident in slippage trends. Gross slippages at the bank level declined sharply to ₹1,028 crore in Q4, compared to ₹1,314 crore in the previous quarter.

This moderation was largely driven by the EEB segment, where slippages reduced meaningfully to ₹690 crore compared with ₹942 crore in Q3 FY '26. At the same time, recoveries and upgrades improved sequentially, though marginally, taking the total to ₹360 crore during the quarter.

Early delinquency indicators are also moving in the right direction. In the EEB book, the 0 to 90 DPD pool declined to about 3% of advances, down from 4.6% in the prior quarter, with the sharpest reduction seen in the SMA-0 category.

Please refer slide 23 of the investor deck for more details. As a result of these trends, inherent asset quality metrics strengthened further.

Gross NPAs remained stable at 3.3%, while net NPAs improved to 1%. Credit cost moderated to 2% for the quarter, compared to 3.3% in Q3, and stood at 3% for the full year of FY '26.

Provisioning coverage remains comfortable, with PCR at 71.1%, which rises to 74.2% if we include the provisions against security receipts, and it rises to 84.9% when adjusted for technical write-offs, which means including technical write-offs. With that, let's move on to the financial performance for the quarter, beginning with net interest income.

For the quarter, stood at ₹2,796 crore, reflecting a 1.4% year-on-year growth and a 4% sequential increase. This was accompanied by strong expansion in margins, with NIMs improving to 6.2%, up from 5.9% in Q3.

The margin uplift was primarily driven by nearly 23 basis points quarter-on-quarter reduction in deposit costs, along with a 14 basis points improvement in advances yields. Turning to other income, performance was encouraging, with growth of 10% year-on-year and sharp 12 12% increase over the previous quarter.

Within this, the third-party products distribution income rose significantly by 34% year-on-year, reflecting improved branch-level penetration and stronger cross-sell execution. Processing fee income also rebounded, supported by higher disbursement volumes, specially within the EEB portfolio.

Moving to expenses, the operating cost for the quarter came in at ₹2,125 crore, representing a 10% increase sequentially. This was largely attributable to non-recurring items, namely PSLC-related costs and technology expenditures.

On a full-year basis, however, operating cost growth remained well contained at 9% year-on-year, while the opex-to-average-assets ratio rose to 4.4% for the quarter due to these few non-recurring items. For the full year FY '26, the ratio remained within our guided level and was at around 4%.

Consequently, operating profit for Q4 stood at ₹1,441 crore. After accounting for provisions and taxes, the net profit for Q4 was ₹534 crore, representing a 68% increase over the same period last year and 159% increase over the previous quarter.

Return metrics for the quarter also strengthened, with return on assets for the quarter was at 1.1% and the return on equity was at 9%, reflecting improved operating efficiency, underlying profitability. Briefly turning to the full-year performance, NII for FY '26 stood at ₹10,830 crore, decline of 5.8% year-on-year on account of moderation in NIM led by continued expansion of secured book and impact of the repo rate cut.

Operating profit stood at ₹5,855 crore, reflecting resilience in core earnings. NIM, opex-to-assets, and credit cost for FY '26 were 6.1%, 4%, and 3% respectively.

Higher credit cost was on account of pressure on the EEB book, industry-wide phenomenon that we saw play out during the year. Net profit for the full year FY '26 was ₹1,224 crore, resulting in an annualized ROA of 0.6% and ROE of 5%.

To summarize, the quarter reflects steady progress across growth, asset quality, margins, and balance sheet resilience. Actions over the past two quarters are translating into more stable portfolio, improving profitability, while staying disciplined on risk and cost.

We remain focused on sustainable growth, strengthening the liability franchise, and further improving the return metrics. With that, I'll now hand it back to the moderator, and we'll be happy to take your questions.

Hi, team. Congrats on the quarter.

Am I audible?

Yes. Hi, Piran.

Yes.

Hi. Good evening.

Just first question is what led to the strong average CA growth this quarter? Doubled just from

[unclear]

nine

crores etc. Yeah.

I think Suresh—

We'll have Suresh answer this. Yeah.

We had focused on current accounts affluent segment, where we could manage a good growth in the current account at the granular level, month-on-month, which has resulted in the total growth which has happened throughout the year.

There

is

no seasonality in this, right? It won't fall in 1Q because of some—

These are small SME customers who have opened current accounts with us. There is no seasonality into it.

Our TASC department has also continued to flow deposits from the various trusts. That has also added.

Piran, it's the result of all the business initiatives and efforts, right, geared towards improving the current accounts.

Is there any particular target CA ratio that we have in mind?

We will continue to improve. We have not yet crystallized the target to what percentage we can, but definitely our focus is that we will continue to improve.

Over here last year also we were at 31%. Sooner we achieve at least this milestone, we'll set up a goal to fix our next target.

I think our overall CASA, if you see, has gone up from 27.3 to 29.3. Within that, CA has improved further.

As Partha sir mentioned, we'll continue to improve it further. We're also broadbasing and introducing more products within the stable of current accounts and savings, that will help us in terms of improving the CASA further.

Understood. Fair enough.

Secondly, how are we thinking about neutralizing our PSLC shortfall and go back to that era of selling PSLC rather than purchasing PSLC?

A number of steps have been taken in this regard. This year, the cost has been definitely quite high, and in the Q4 also, we had to incur a cost of around ₹60 crore.

What we have done is that we have revamped our entire trade process in our EEB segment and also focused on our direct agriculture loans. The effect of this are going to come.

This year, we are expecting that the cost would come to, I would say, almost 50% to what we have incurred last year. That is our aim this year.

Going forward next year, it will be almost neutralized or coming to zero, and after that, we will continue to earn from this PSLC portfolio. Sir,

this is all from direct agri loans?

This will be more from the EEB segment also, where allied agri loans will be covered, and also the agri loans also, and also the small, marginal farmers, that's a macro fee.

We also improved, Piran, the process that we have for microfinance loans for EEB segment, and the percentage of EEB loans qualifying for PSLC has been improving steadily, which will also help us going forward.

Rajeev, what sort of EEB loans today do not qualify for PSLC and going forward they will qualify? What is the change if you can—

No, again, I am telling you that it is more of a revamping of a process. Currently what was there, the agriculture or the allied agriculture loan that we are giving it are not getting captured into our system.

We have made that enable, and I can tell you that a year ago, it was only 10% or 15% of the EEBs which were qualifying for PSLC. Now it has already increased to 40%.

Going forward, it will increase to 60%, 65%. The revamping has already been done, and I think for the RBI also the circular clearly mandates that you have to follow certain process and procedures to get them qualified.

Those steps have been taken, and we are seeing the green shoots. As I've told you that almost 40% now have been covered of the EEB segment.

Going forward, this percentage would increase. Apart from that, we are also focusing on the agriculture loans, that is the direct agriculture loan, which will have the PSLC effect.

Understood, understood. Sir, my next question is about the vehicle business, vehicle finance.

Now the book is ₹5,600 crore, it's a decent size. Can you talk a bit about it?

Firstly, who's our typical customer who comes to us? Secondly, how much of the cross-sell happens to own deposit customers versus open market?

Is this entirely car loans or is it two-wheelers, CV, etc. also?

Yeah. Shantanu will be answering.

He's our retail head.

Hi. To answer your first question, the vehicle loans includes two-wheeler as well as car loans,

yeah, and

the majority of this customer segment is salaried and self-employed mix, but majorly it is salaried segment. When it comes to other vehicle financing you talked about is commercial vehicle and construction equipment, where our major focus currently is on a strategic and super strategic customers and some portion, say about 9%, 10% of our customers, are retail, who are holding the fleet of less than 10 vehicles.

Super.

About the cross-selling, currently about almost 20% of our volume comes from our own customers, which you call it existing branch customers. That is about 20%.

Sir. Just broadly, what is the mix of loans between CV, PV, two-wheelers?

Okay. About ₹3,000 crore is commercial vehicle, about ₹1,700 crore is construction equipment, about ₹1,800 crore is car loans, and about ₹900 crore is two-wheeler loans.

This is perfect. That's it from my end.

Thanks, and wish you all the best.

Thank you.

Hey, thank you for the opportunity. Just on the operating expenses, you mentioned there are some one-off factors.

Do you mind give some color and quantify those, please?

There is some disturbance. Can you just repeat a little bit?

Zhixuan, can you repeat the question?

Am I audible now?

The voice is breaking.

Am I audible?

It's better now.

Okay. On the operating expenses, you mentioned there are one-off factors.

Do you mind quantifying those one-off factors and the nature of it?

I think during the quarter, we had a couple of items which actually do not appear to be recurring. One is the PSLC cost, the Priority Sector Lending Certificate cost, which as we said that we have taken actions that this should get reduced.

During the quarter, we had roughly around ₹60 crore of increase that came through because of the PSLC cost. Apart from that, we had an increase in the IT expenses also, which was also amounting to a similar level of around ₹60 crore.

Within this, there are a number of items which were more timing-related issues, and therefore we don't expect that to get repeated immediately. These two I think are a couple of the recurring items which came through during the quarter, roughly amounting to about ₹120 crore.

Got it. Thanks.

Then the next question is, I know macro is uncertain, but assuming a kind of relatively stable environment, how should we think about ROA for FY '27?

The audio wasn't very clear. We couldn't understand the question.

The voice is breaking, actually. If you can speak a little bit slowly, I think it will be better.

Oh, sorry. Yeah.

Any thoughts on FY '27 ROA?

On the ROA. ROA, we saw an improvement from 0.4% in Q3 to a 1%

in

1.1% in Q4, and the reason for this is one is we have seen improvement in the income as we had highlighted, the cost of deposits had come down, and also the other income has seen an improvement. Apart from this, we have seen a reduction in the slippages, which led to a reduction in the provisioning or the credit cost.

These factors, despite a bit of a partial offset to increase in expenses, overall we still saw the overall profitability improve sequentially. Going forward, as we have been guiding the market, we will be working towards seeing how we can gradually keep on improving the ROA towards the guided level of between 1.6% to 1.7% ROA by the exit of FY '27, give or take 10 basis points.

We intend to make sequential improvement towards that, aided by multiple factors, and also further sort of improvement in cost of funds that we envisage. Yeah.

Just to give more clarity on it, one of the major factors is that we could reduce our credit cost. To 2%.

Number one. Number two is that NIM has increased, as you've seen, to 6.2%.

These are the two major factors. Definitely, the other income has also gone up.

This is the third one. The fourth is that despite an increase in the operating cost, the operating cost has increased, this trajectory of 1.1 has been maintained.

Got it. Thank you so much.

Thank you for the opportunity. Sir, first question is on the month of April, now that elections are almost closing in tomorrow, I think this time we didn't have any interruptions, to say, from collections.

Fair to say this collection trends would have held up through the events of April as well?

Let me tell you a clear picture that till now there is no adverse effect on collection on account of I would say either election or war. The collection efficiency, what Rajeev has stated, is still continuing, but definitely a few I think one, two basis point, it comes down during the month of April, but which is quite common for that date.

On the ground, no adverse effect is being seen, and we are hopeful and expecting that this trend will continue.

Great, sir. Sir, second question is on the RBI ECL impact.

I don't know if you've already spoken in the past about this, but given that the final guidelines are exactly as what the draft was, we would have had some time to calculate. How would your steady-state credit costs look like?

I'm not concerned about the one-time impact. I'm asking about the steady-state credit cost, and just a corollary to that question also, on your unsecured book, what is the standard asset provisioning that you currently do?

Rajeev here. I think on the ECL, we do have the transition impact, which is based on the December 2025 portfolio, based on the earlier draft circular.

Yes, I think the latest circular came through yesterday. We are still going through if there are any further changes to that and what will be the implications of it.

Based on the earlier draft circular and December 2025 portfolio, the transition impact we expect is to be roughly around ₹1,250 crore, which as we are allowed to transition it or spread it over 5 years, would translate to about a ₹250 crore per year impact. Given the latest circular talks about this can be passed through the retained earnings or capital reserves, we expect roughly 16 to 17 basis points of impact on the CRAR every year for those 5 years.

That's the implication based on the transition. The flow impact is still being computed.

We don't have a number as of yet as that gets computed. We'll have to assess the new circular implications, and then we'll be able to come back as what the flow impact should be.

As of now, this is the range of impact based on the transition that I can share with you. Standard asset provisioning—

Standard asset provisioning. Yeah.

On the standard asset provision, we basically on the unsecured portfolio, which is let's say microfinance, which is the largest one, EEB— I will give you the data,

currently we are having around ₹1,072 crore provisions on all the standard assets. That includes two additional provision.

One is that upon the standard assets, we take an additional 0.75%, and also we have got an additional provision of around ₹136 crore. With this, I think ₹1,072 crore provisions are already there in our books.

Our impact on the ECL going forward, the floor is 5% in most of the cases, excepting some where the floor is a little bit less. Since we are already continuing to make 1% additional provision on the standard assets, which is 75 basis points higher than what is now required as per the IRAC norms for the day, impact may be that will be 4% on the merged value for the day.

I think that going forward, the way we are managing our assets, if we can manage our SMA-1 and SMA-2 books much more prudently, this requirement will not have that much of effect on our credit cost.

I think if I can translate these to percentages, for EEB the requirement is 0.25%, we maintain 1%, which is 75 basis points higher, like Partha sir mentioned. On personal loans and on ABG, it's around 0.4% in line with the RBI requirements.

Great. Just to rehash everything, EEB, you're already maintaining 1%.

Non-EEB unsecured is the only portion where you have to go from 40 bps to 1%.

That's correct. That's correct.

Great. Thank you, sir, and congrats once again.

Thank you.

Hi. Thank you for the opportunity.

I wanted to know that what proportion of your deposits would be government-related, and the second question is how should one think of the margin trajectory from here on? Should we see improvement or 4Q generally 4Q is a seasonally strong quarter, can we see some moderation from here?

Government. Our Suresh, our Head - Branch Banking is answering this.

Our government deposits on the CASA side would be around ₹6,000 crore out of the total deposits that we have, CASA deposits.

Retail composition is overall 74%, as you have seen for the day. We have improved from 69% last year.

It has improved to 74%. We have reduced the dependence on bulk deposits, and majority of this bulk deposits used to come from the government departments also.

That portion we have reduced it. Earlier It is almost ₹3,200 crore.

In quantum-wise, we have reduced as of the last year from that year, and percentage-wise, almost 7%.

The CASA share works out to around 12%. 12% of CASA is government deposits.

Correct. Yeah.

On the margin trajectory, just adding on to that, our TD repricing is largely done or we should see cost of funds benefits following through in the coming quarters as well?

I think as we had guided, we expected the cost of funds to continue to improve in Q4, Q1, and Q2. We have seen the improvement come through in Q1.

The term deposit repricing has happened, and therefore we had seen sequential improvement, and as a result, the margins have gone up from 5.9% to 6.2%, the 30 basis points increase, largely driven by the cost of funds, partly also due to the impact of lower slippages, resulting in lower interest reversals, right? As we go through the next two quarters, we do expect further improvement, because there are further term deposits coming in for renewals, we do expect at least another 10 to 20 basis points of improvement over the next two to three quarters.

10 to 20 basis improvement on cost of funds side, right?

Based on the cost of funds improvement on the NIMs.

Okay. On the credit cost trends, how should one think?

Should we consider 4Q as our base or again, as 4Q, as you highlighted, there were lower interest reversals as well due to lower slippages. Should we see the slippage trends moderate from here or we could see it slightly inch up in 1Q?

On the MFI book.

I think we have, as I've mentioned, our X bucket collection efficiency has improved to 99.6% for the quarter, and in fact March month was 99.7%. If we are able to maintain these levels, we definitely expect slippages to continue to remain at these levels.

We of course need to be wary of the implications of the war that's happening, what exactly happens on that front, as well as any other externalities. Based on the efforts that the team has taken and the improvement in the collection efficiency, we do expect these slippages to hold at these levels and maybe improve marginally as well.

In fact, EEB has joined with us today.

What I am telling is that EEB has made a remarkable improvement.

The slippages have been almost

last quarter, it was 1,328, it has come down to 793, the SMA-0 point I am just checking for that date,

and also

in the slippages, even if you see that the gross slippages has also reduced from 942 to 690. The trend is still continuing, we are quite hopeful.

I think this is an important point. The overall DPD pool also, we have seen an improvement.

The EEB DPD pool has come down from 4.6% to 3.1% across SMA-0, 1, and 2, with the biggest reduction in SMA-0, and that will also help us in terms of containing the slippage for the next quarter at similar levels.

Okay. Any growth outlook on the deposit and loan growth front?

As I remember, earlier we had guided that deposits will continue to grow faster than advances, but currently we are lagging. How do you think the deposit environment panning out, and what would be our guidance?

Because yeah, given our balance sheet, we are still running at a lower rate versus the industry loan growth. What would be our outlook for FY '27, '28 for loan and deposit growth?

Our guidance remains the same. We are practically aiming a growth of around 14%, 15% in the credit, and the endeavor would be to have a better deposit growth rate.

Yes, a challenging factor is that the entire industry has now reversed. If you look that from November onwards, the incremental credit growth is more than the incremental deposits growth.

We have to also look into the industry scenario accordingly also. Definitely, the credit whatever the guidance were there, it will continue.

Also to highlight, on our credit growth, whilst the overall number is around 13%, if we exclude EEB, I think the non-EEB book has grown by almost 25%,

and

we know that the EEB has gone through a cycle, year-on-year, it's been a contraction. We have been able to reduce the contraction to only about 5% year-on-year, compared to the industry which actually has been contracting much larger.

Therefore, actually in EEB our market share has improved even further during this last 1 year as well. Our numbers are not exactly comparable with the peer group because of a little larger portion of microfinance that we have in our books.

On the deposits front, we have consistently shown higher deposit growth than advances. This time, as we mentioned, consciously we have reduced the bulk deposits share, and if we exclude the bulk deposit, our retail deposits have grown by almost 17.8 or roughly 18%, which shows a very healthy growth rate.

Got it. On the deposit market front, are we seeing any intense competition there or is there a chance of term deposits repricing across the banking sector?

I think the deposits competition is definitely intense. We did see in the month of March itself the deposit rates go up quite significantly being offered by the competition, and therefore we have been focusing on improving the structural granular retail deposits, and that's where the focus has been, and we want to remain steady on that particular strategy.

Therefore, we took a call to not grow the bulk deposits significantly during the Q4, and that should help us going forward in terms of optimizing our cost of funds.

Sure, sir. Thank you.

Lastly, what would be our average LCR for the quarter? 130.

Our period-end LCR was around 131%. Average LCR, I think, would have been range-bound between 130 to

140%. 138.

Okay. Basically our margins might have been supported by some liquidity LCR coming down as well, because as far as I remember, 1Q we had a LCR of around 200 odd percent.

That has come down gradually to 130 odd percent, right?

It's the result of the bulk deposits coming down, which is helping us on the LCR also.

Okay. Sure, sir.

Thank you for answering my questions.

Sir, thank you for the opportunity. See, one question that I had was on your credit cost.

This year, should we expect a credit cost somewhere about 1.5, 1.6%? Now that the EEB stress obviously is easing out, and I think the ECL impact would be largely taken through the balance sheet.

Is that a fair assumption in terms of credit cost for FY '27?

We are keeping our guidance unchanged, because if you look the last year's performance, the credit cost has substantially improved and we have ended up at 2% for the day. Going by the current trends in the EEB, specially in the EEB segment, the rate of recovery and the collection efficiency for the day, I think that there will be some improvement in the credit cost going forward.

Yes, definitely there are certain concerns like the war. We don't know the impact, how will it come and how will it impact the economy, the fuel price, the availability, and then the cascading effects on the other sectors of the economy.

This is there. As on I would say that going by the current trend, the economy is moving and the portfolio of our bank is also showing signs of a lot of green shoots for the day.

I think that we can keep that guidance and we will be trying to achieve as close to that.

Our guidance we had mentioned was between 1.6 to 1.7% by the exit of FY '27, which is by Q4 FY '27, and we will still endeavor to work towards that.

Okay. Are we largely done with the sale of NPAs pool now?

It is an option, we see it's a part of NPA management. The option is neither closed nor we are following it.

We have not yet crystallized the thing. This is some opportunities we will be looking.

If we get some good prices of our books, we may postpone the cash flow. That's the only thing.

That's the only advantage happens in ARC sale. It is something as a part of management.

It is till now I can say that we are not crystallized on that, but at the same time the options are open.

I think the two other factors, the slippages have come down, the collection efficiency has picked up. The ARC sale that we did in Q3, prior to that we did 3 years ago.

It's not something that will be done every quarter, but as Partha sir mentioned, this is an option that is available for the bank, and we will look at it whenever we need to do any kind of an NPA management. There's no immediate plans as of now.

Sir, lastly, in FY '27, with that the credit cost will come down, should we expect an ROA above 1%?

We have started the trajectory, that much we can say. You see that from 0.2% in September, we improved to 0.4 in December and now 1.1.

The endeavor is there. We have not yet changed the guidance for the day, and going by whatever the green shoots we are happy seeing in the EEB segment, if that continues and we are also focusing on the other income front, specially in the wholesale segment.

With all these things and the other income by reducing the operating costs on account of PSLCs, the steps that we have taken for the day, I think that we will try to achieve as near to that. That much I can say.

Definitely a challenge, but we are not changing the guidance as of now.

Just to reiterate, the guidance we had said was 1.6 to 1.8% of ROA by the exit of FY '27, which is Q4 FY '27, give or take 10 basis points. We will work towards meeting those numbers.

Sure. That's very helpful, sir.

Thanks a lot.

Hi. Am I audible?

Hi,

Hi, good evening, everyone, and congrats on a good quarter. Few questions I have, firstly on the NII growth itself.

If I see NII growth this quarter is at 4% Q-on-Q growth, and this has come in despite pretty strong advances growth this quarter. Even the previous quarter, we had a decent pickup, and margins have improved in both the quarters.

Any reason why this growth is lacking the advances growth despite such a margin expansion? Look,

let me just tell you, first of all, the interest income last year was affected due to the repo rate cuts. Almost 125 basis point, that cuts were there in the repo rates.

Number two is that we also rationalized our own MCLR. The effect was almost 200 basis point on that account for that year.

If you look at the balance sheet, the advances have taken place mostly the incremental growth, 50% of the incremental yearly growth has taken place in the last quarter. For the rest, the effect we have not got in that quarter itself, because many loans were disbursed say in the month of March or end of March for that year.

The effect of NII was not given on that year. One good thing is that we could actually arrest the declining trend of the repo cut.

If you look at the entire figure for that year, because January also there was a 25 basis point repo cut was there, I have to pass on to my all the borrowers for that day. Still that we maintained at the same level at 5,428 vis-à-vis 5,431 during the previous quarter.

The effect of this increase what you are saying is that will be seen during this quarter, I can say.

I think specifically for your question, Nitin, three, four points. One is the advances growth came, but that growth was rear-ended, we will see the benefit of that in the coming quarter.

The second is, this quarter had roughly 2 days less, I think just from a days count perspective there is an implication as well. Third is the repo rate reduction that happened in December of 25 basis points, which had an 11 basis points impact on our book, roughly 46% of the book got impacted.

Of course, partly offset by the growth that we saw, the momentum we saw, specially in the EEB growth that came through. I think these are three or four factors leading to the 4% improvement in the NII for this quarter.

Got it. The other observation is around the collection efficiency.

If I see for the month of March and for the quarter, the gap has widened. While there used to be, I would say, last quarter was a 20 basis point gap if I look at the collection efficiency excluding NPAs at 98 and 98.2.

This time for the month of March, it has stood at 98.6 versus 99.3 for the quarter. How should one look at it?

Has March deteriorated over the 3 months of this quarter or how should one read this?

No, I think the way it can be read is that we actually saw improvement in the collection efficiency started to come through the month of November last year. Lastly October was impacted quite heavily because the overleveraging saga was still playing out.

From November onwards and mid of November is when we started seeing the improvement come through. Therefore, I think, we are seeing the difference between the quarter versus the difference between the months to have a difference in the basis points, right?

If I may just add to what Rajeev spoke, in our month of November onwards, we have been tracking current X bucket collection at 99.6 onwards and if they in January and February month at 99.65 and 99.7. March last day was a holiday, which impacted as we have a holiday billing, that resulted into 98.9 number of something, and that overall we finished the quarter at a much better number on the current bucket number, that's at 99.6.

Overall, there is nothing to worry in terms of the March overall not holding compared to the entire quarter. The quarter numbers are far superior if I have to compare it to quarter three.

Because November, December also saw an improved position, and therefore December to March you may not see a big delta, but quarter-on-quarter you'll see a bigger delta.

Till I think 15th November the situation was not that much encouraging,

but

definitely from 15th November onwards, the collection efficiency has improved a lot and steadily being maintained. That also you can see as part of your SMA-0 improvements in EEB business as across SMA-1 and 2 as well.

All the buckets have come down. Including slippage numbers.

That clearly shows from the November month, the progress has been so significant that all the buckets, including the slippages, overall has come down to a substantial amount.

Right. The other question is around the profitability overall.

When we are indicating 1.6 to 1.8 ROA by Q4 '27, how much of this improvement is hinged around MFI now that the collection efficiency has already improved to almost near normalized levels now already? How much of it is a further expansion?

The given and recovery in the non-MFI businesses. Can you give some profitability of non-MFI business therefore by some split or some color around that to understand this improvement in ROA better?

I think three or four key factors, broad factors. One is the credit cost improvement as we mentioned from the current 2% level to 1.6, 1.7%, we do seek the credit cost itself to provide further upgrade on the ROA.

Second is, as Partha sir mentioned, we are focusing on generating higher other income, and this will be the result of further capabilities which are coming in our secured asset businesses, specially wholesale banking. As these come in, we should be able to see some improvement there.

We are also expecting as disbursements pickup, improvement in the processing fees and the momentum on the third-party products income to continue. I think other income will be one of the key drivers.

We do expect at least about 10 basis points to come through there in the other income. Operating expenses, as we've mentioned, like PSLC cost itself, as that reduces, I think we should be able to get some delta from there.

These are the two or three key factors. Overall business momentum is important, and I think we'll continue to maintain that momentum.

The good thing also is that as we had set up a target of around 58% secured mix by March '27, we are almost near that now itself. We've met that target nearly a year in advance, and therefore our growth rates across EEB and non-EEB can start to converge to some extent.

Right. Rajeev, one curiosity that I have is around the LCR ratio rather, because we have been able to maintain one of the better LCRs in the industry, even this quarter after this decline at 130, 140 average that you talked about is also very, very healthy number.

What really differentiates Bandhan Bank LCR versus the other large private banks, because if I compare on the retail mix of deposits or CD ratio, there is not much of a difference. Why the LCR numbers are so much better, not just in this quarter, but historically as well?

I think one is that the immediate answer is that our dependence on the bulk deposits have come down. The volatility has been contained or has been arrested to a large extent, requiring less amount of LCR to be maintained.

I think the other factor is that we have a large portion of deposits coming from retail. Our retail deposit share is much larger, and that has a much lower run-off factor, between a 5% to 10%.

We have a lower share from corporate deposits, which have a higher run-off factor of 40% or 75% or 100%. Therefore, I think to that extent there will be difference in terms of comparability across the different banks.

If you add the non-callable part of the bulk deposits, retail plus non-callable adds up to more than 95%. The fluctuation and the volatility is concentrated more on the balance 5%.

That dependence has come down and that has helped us to maintain a better LCR.

Got it. Thank you so much.

Thanks for all the insights.

Hi, sir. This is Jai Mundhra.

Rajeev, I heard your opening comments on ECL shortfall

Hi. Is this better?

Yes.

Okay. Rajeev, my question is you mentioned that there is a shortfall of, let's say, ₹1,200 odd crore in ECL transition, and we have a credit cost guidance of 1.6, 1.7.

Given that now ECL provides that the transition can be adjusted through reserves, would you be, let's say, if you have buffer, you can still flow in the P&L and then you can adjust in the reserves, or you would still like to minimize that shortfall? I just wanted to understand your thoughts on those.

No, I think we are, as we said, we are assessing, look, the latest circular came yesterday. We are actually evaluating what the latest circular allows, as we understand, is to take it through the retained earnings and also allow the period of 5 years with which it could be spread out.

Therefore, we will look at the flexibility that offers and how exactly it impact the balance sheet. Also, the assessment we did of the number we shared was based on December balance sheet.

We will have to reassess based on the latest balance sheet and, of course, how structurally we are able to change the balance sheet over the course of the year. These are the various factors that we'll have to assess to be able to take the final approach on the same.

Okay. Now the circular allows you to adjust through reserves.

Would you be keen to minimize the shortfall or would you be keen to adjust it through reserves because that is allowed? That is the broad question.

I think it will also depend upon the profitability appetite that comes through during the year. Of course, wherever there's opportunity existing, we will try to shore up our provisions.

As of now, this is what is the broad approach.

₹1,200 crore is an estimate roughly on the basis of Q3, which is a December numbers. March number and going forward also, it needs to be crystallized.

Maybe that we may have a lesser effect.

Right. Secondly, sir, on your write-off and provisioning, let's say if ₹100 slips out of EEB, is there any set provisioning policy?

Because I think you have to provide 100 by year end in 365 days. Do you follow 25, 25 or is there any pattern?

Is there any provisioning policy for MFI? Yes.

We do have a provisioning policy, but we just maintain the PCR. If you look at the PCR including the SRs for the day, we are maintained at 74.5%.

That is the crux we want to maintain it, and to maintain that PCR, whatever the additional provisions are required, we do it once we write off our portfolio. The main theme is that we keep the PCR as the target point that need to be maintained, and based on that, whatever the shortfall in provisions on account of write-offs are there, these are made for the day.

We take a more conservative position than what the IRAC requires. I think for us broadly, I think at 180 DPD itself, we take almost 100% provision for the EEB portfolio.

We accelerate. Mostly we accelerate there.

Right. That is good.

Sir, lastly, the revised circular says that if there is any exposure which has government-guaranteed linkages, it can have very small stage 1, stage 2 provisions. Any of your EEB portfolio, either through CGFMU or some other scheme, do they qualify for that kind of a status or no?

For EEB portfolio, currently we do not have any government back guarantee, but we are evaluating in terms of how do we want to progress it from here. As of now, there is nothing which is guaranteed backed by the government side.

Currently, we don't have any CGFMU coverage for EEB. That option is open for us, we'll be evaluating.

Sure. Lastly, Vishal, since you are there on the call, if you can talk about your resignation, I thought everything is going on very well.

You have almost [laughter] turned around or almost normalized level of slippages. What happened?

Thank you.

I'll speak to you offline on this one. It's a personal career advancement, nothing beyond that.

Yes. Things all looking rosy, whether to go when you are asked why are you going?

I'll leave with that. Bank is now, I would say, much, much more process-driven rather than person-driven.

I've said that we should look at it for the day. We have brought many changes in the EEB.

Rather, we have transformed the model of the EEB business, and a lot of technology and other inputs have been made. Vishal has implemented it very meticulously.

It is his personal career growth that has fired for, and we wish him all the best.

Sure, sir. Sorry, sir, if I can ask one more question.

There was media reports on some activity going at promoter level. Is there anything that you can add?

These are all rumors, we have already said for the day, these are all rumors. Nothing is going at the Holdco level.

Nothing is going to affect the shareholding pattern of the bank. If something is going at the CIC level, that is their call, which anyway is not going to affect the bank.

Right. Very very clear, sir.

Thank you, and all the very best.

Thank you. Thank you.

Hi, Rajeev. Just one question on this employee cost as well.

I think if I exclude the base quarter number from the 3Q, the impact of labor code, I think I see a 14% increase in the employee cost Q-on-Q. What led to that?

I can say that ₹73 crore additional employee cost was there during this quarter. This has come on account number one is that, yes, definitely this month there was large number of holidays, and we have kept the bank open because to reduce for the collections and here, we have kept the bank open for 2, 3 days, for which we have to pay some additional salaries to the employees as per the rules of the bank.

That has actually increased in the employee cost for the day. Otherwise, all other costs are in line with what we have incurred in the previous quarters.

Correct. Adding the new labor code related impact we had already taken in Q3.

There was no incremental impact that came through in Q4. As Partha sir mentioned, this was because of a couple of days additional that people had worked, and the salary impact of that, and some normal salary increases.

Okay. If I look at the reported yields, actually they have increased in this quarter versus the 3Q despite this repo cut impact.

What drove that?

I think there are two things. One is, as we had done the ARC sale in Q3, a large chunk of the NPA portfolio had gone away, and therefore you get the immediate benefit on the yield on the overall portfolio in the next quarter, right?

Because the NPA book was actually suppressing the yield, so that was one of the key reasons. Apart from that, there was, as we mentioned, improvement in the EEB disbursement as well, and as the EEB book increased by almost 8% on a quarter-on-quarter basis, total advances increased by 6% on a quarter-on-quarter basis, which meant that overall mix perspective, there was some further benefit that came through on the yield.

I think those are the two key reasons.

Fair enough. The last question which I have was on the slippages front, I think even though the X bucket collection efficiency has improved quarter-on-quarter, but you were trying to guide us on the slippages front that it will be similar to what it was in Q4.

Is there something on the ground which is different or which you expect to be worsening in this quarter?

No, we've mentioned that slippages will basically hold to improve, right? That's the range that we have given.

We would expect to have some gradual further improvement as well come through. We are also wary, as we mentioned, of some of the external risks which are coming through.

Specially, we don't know fully if the war-related impact will come through in what shape and form. We're keeping some bit of conservatism there.

At the end of the day, based on the collection efficiency improvement, we are fairly confident on the level of slippages that we have achieved as well as what further we can improve.

Thank you.

Hi. Thanks for the follow-up.

Just to reconfirm what Partha sir said, MFI slippages was ₹690 crore this quarter?

MFI, yeah. MFI is 690.

690, right? Yeah.

Gross slippages

690, and recoveries were 142. Net slippages is 548.

Okay. That's it from my end.

Thank you.

Thanks for the follow-up. Sir, sorry if this question has been asked previously.

When you say the margins can improve by another 15 to 20 basis points, that is on the 4Q number or that is on the full-year number? Full-year number being 6.1.

Just a corollary to that question, it means if your loans are growing at 14, 15, NII growth next year should be ahead of that. Is that a fair assumption?

The NIM improvement that I mentioned was sequentially on quarter numbers. Our quarter numbers are 6.2%, and on that, we expect 10 to 15 to 20 basis points improvement spread over the next two to three quarters.

The guidance, as we have been mentioning, is by the exit of FY '27, we expect NIMs to be around 6% on total assets, which means on earning asset basis it will be around 6.5%. We do have a line of sight of the next 10 to 20 basis points.

We need to find another 10 basis points. That's the aim that we're working on, of course, on a best-effort basis.

Thank you, sir. Just if I do the math, 10 to 15 or even 20 basis points on NIMs, 10 on fees, another 20 on credit cost, is there something I'm missing?

Because we need 70 bps post-tax, which is almost 90 pre-tax. Is there something I'm missing for the ROA waterfall?

ROA, as we said, we already touched 1.1%, and our aim is to reach 1.6% to 1.8%, right, give or take 10 basis points, by this Q4 FY '27. Say there's a journey of about 50 to 60 basis points further that we need to climb.

Some of these components that we mentioned are the ones which will help us, right, in terms of meeting that. The timing of it will depend upon every quarter to quarter how exactly we make a progress.

We have to be also aware of any kind of a external shocks or risks etc. that could come through or any headwinds that could come through.

We will definitely try and see how we can get to these numbers despite those headwinds.

Thank you, sir, and all the best.

Thank you.

Yes. Good afternoon, gentlemen.

Congratulations on the excellent set of numbers. Can you listen to my voice?

Yes, Dev. Thank you, Dev.

Yes. As far as my knowledge goes and how far I understand that you are trying to increase your share of secured book, right?

By the end of FY '27, are you trying to target increased share of secured books in your total book portfolio, and what would be that percentage? If you intend to increase the secured portion of your portfolio in comparison to our EEB books or whatever that unsecured portions are, what would be the effect on your NIMs?

Is it going to calm down from 6.2 to more or something?

Because

if you are trying to increase your secured loan book portfolio share like the other banking units or banking companies, their NIMs are far below from your NIMs. If you're trying to converge into that path, are your NIM going—

We got your question. Let me just explain.

We had a target of doing a secured-unsecured business of 58:42. That's what our goal as FY '27.

Exit of FY '27, we have projected a secured book of 58% and 42% unsecured. We have already achieved that or near to achieving that.

As if you see my Q4 results, we are already at 56% and another 44% is unsecured for it. Second part is that, 56 to 58 will not have much impact on the NIM.

Let me tell you that we are keeping our trajectory or the aim that our EEB will continue to be 1/3 of our total portfolio. In both ways, the unsecured book, the EEB book will also grow, and the secured books will also grow.

The question of the NIM, as far the NIM is concerned for the day, the EEB book, if the major problem of the EEB book if you look in the past year was the delinquency level, or the NPA level, and because that's where the interest reversals took place and where the NIM was largely affected. If you can continue even with this 35% share and maintain the present, I would say, the NPA levels or the SMA book and the delinquency level, and if we continue to improve it further, it will not have any much impact on the NIM as for the day.

Again, if there is any shortfall, let me again tell you about our direction for the day that we are now focusing on the other income of the secured book. If there is any shortfall in the NIM on account of the growth of the secured book, it will get compensated on the other income.

Overall, NIM plus other income, what we have projected is around 6.2 and 1.5. I think 6 and 1.5, 7.5.

That will remain intact. That is our aim.

If somewhere if you say that if you come out at 5.9 or 5.8 on our NIM, the other income will also go by 20, 30 basis point more in that segment. Overall that trajectory of 7.5%, we will try our best to maintain it.

Okay. For going forward in say within 5 years, do you continue to stick with that proportion of 58%, 42%, or there would be something, long term, any goal or target that you are continuously pursuing to achieve, 42 to what?

Currently that ratio remains. It is again the experience that we will see.

We will have to strategize or we have to change our strategy at that point of time. The reason for going to secured both as we have told that there were two, three reasons.

The first one was that we were too much on the unsecured books, and we are a universal bank. It's the depositors' confidence is very important, so that's why a secular growth in all the advances comprising secured and unsecured books is necessary.

This is the first thing why we have shifted. Number two, because now my portfolio is also becoming much, much stronger than what we have been a year or 2 years before for the day.

This is one thing. Currently, definitely we have not thought, but again, it will all depend on our experience.

We hope that things like corona or other things will not happen, or even this war would also end, there will not any impact. It will completely depend on the experience that we gather going forward.

As of now, as I've told you, that we want to be remain a leader in the EEB segment and we continue to do that. EEB segment is definitely our focus area.

We have seen an 8% growth Q-on-Q, but definitely our secured book has grown at 25%. The focus this year is on the other income part from the secured group, not only on the interest income, and along with a reasonable growth in the EEB segment also.

Improving credit cost.

Limiting to credit cost, yes. Limiting to credit cost.

Thank you everyone for joining, and we hope that you continue to place the trust on our bank. Thank you so much.

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