Change in business mix weighs on Bandhan's interest margin in FY18

Even as the cost of moving to a universal bank is reflecting on its profitability, analysts see strong growth and earnings visibility going ahead

After a sturdy listing in March 2018, Bandhan Bank (Bandhan) turned in satisfactory FY18 numbers on Friday. Overall assets under management (AUM, size of loan book) of the bank surged by 37.4 per cent year-on-year to Rs 323.39 billion as of March 2018, pushing its net interest income (NII, difference between interest earned and interest expended) and net profit upward by 26.1 per cent and 21 per cent, to Rs 30.32 billion and Rs 13.46 billion, respectively.

But, the bank's profitability -- expressed in terms of net interest margin (NIM, which is NII as a per cent of average AUM)