BL Interview. ‘We expect fresh slippages to come down in next two quarters’
During the second quarter this fiscal Bandhan Bank witnessed a loan growth of 12.3 per cent year-on-year. What were the factors that contributed to this loan growth? What is the outlook for this fiscal?
Credit growth always picks up from the second quarter, especially from a month ago before festive season (Durga Puja) starts. This year we saw that credit growth picked up from September as Puja fell in October. Credit demands from both new and existing customers were higher compared to the same period last fiscal. Microfinance segment was a good contributor to this overall loan growth. We added six lakh new microcredit customers for credit. This is a good number. We are expecting that overall credit growth will pick up further going ahead. We expect nearly 20 per cent year-on-year credit growth for this fiscal.
During Q2FY24, the bank’s net interest margin (NIM) soared 20 basis points y-o-y at 7.2 per cent. What is the guidance for NIM for this fiscal?
Our guidance for NIM is between 7-7.5 per cent. Our cost of funds may go up by around 20-25 basis points for FY24. But, our non-performing assets (NPAs) are currently under control. When our NPA is under control, the bank’s interest income will go up.
On a sequential basis, the lender’s fresh slippages came down marginally. What is the outlook for fresh slippages?
Our asset quality has been improving gradually. When credit growth improves, asset quality improves as well. There is a relationship between the two. So, we expect that fresh slippages will come down in the next two quarters (Q3 and Q4).
The share of secured assets as part of the bank’s total loan book reached 44 per cent in the second quarter of the current financial year. What is the target to increase the secured loan portfolio further? And, how will you going to achieve it?
We are on track to raise the share of secured credit to 50 per cent of our total loan portfolio by 2026. Our housing loan is increasing and the commercial banking segment is doing well. These two segments will increase our secured loan portfolio. In housing loans, incremental ticket size has been increasing. Our auto loan segment is small now but there is a good demand for loans. Also, some of the microcredit customers are graduating to secured loans.
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