MFI recovery, credit cost moderation key triggers for Bandhan Bank

Stock has sharply underperformed peers and is available at reasonable levels

At a recent analyst meet, Bandhan Bank outlined a strategic shift to try and reduce its exposure to the high-volatility, micro-finance segment (MFI). The bank is looking to grow its non-MFI vertical consisting of housing, commercial banking and retail assets at a faster pace in order to reduce its exposure to Emerging Entrepreneurs Business (EEB) to 26 per cent of assets by 2024-25 from the current 40 per cent. The recovery for Bandhan has been delayed compared to other microfinance lenders, given a prolonged Covid impact and concentration issues in Assam and West Bengal.

The management indicated that its geographical