Bandhan Bank: Problem of portfolio concentration tightens grip on lender

Dependence on microfinance loans for growth is steadily increasing, which poses a risk in present environment

Bandhan Bank's dominance in eastern India is helping it ring in retail deposits (80 per cent of total deposits) and augment the share of its low-cost current account – savings account (CASA) deposits to 43 per cent in December quarter (Q3).  However, the lender's stock has been hammered by over 11 per cent in two days post results, because the growing dependence on MFI loans is doing more harm than good at this juncture.
 

Proforma gross non-performing assets (NPA) ratio or NPA unadjusted for the Supreme Court’s stay on bad loan recognition rose to 7.1 per cent in Q3FY21. which