Bandhan Bank Ltd. share price target

Operationally good quarter for the bank, PAT grew by 47% yoy driven by strong loan growth and stable margins. Other income showed flat growth more due to change in the recognition of PSLC income. AUM growth was strong at 51%, margins remained stable at 9% which led to...

Bandhan Bank reported a strong quarter in 2QFY19, with net profit at INR 4.88bn (+47% YoY, 10% above JMFe). Gross AUM growth was robust (+51% YoY), while disbursement growth was at 71% YoY. Gross NPLs were largely stable at 1.3%, while total provisions were slightly elevated at 1.1%, despite marginal reduction in PCR (330bps decline QoQ to 47%). Bandhan disclosed that it has an exposure of INR 3.9bn to the IL&FS; group (1.2% of AUM), which is currently classified as standard. Bank believes that the withdrawal of general permission to open branches by the RBI, does not materially impact balance sheet growth in the near term : a) Bandhan averages c. INR 350mn deposit per branch (vs 1.7bn , 1.4bn for...

As per the licensing condition for Bandhan Bank, shareholding of Non Operative Financial Holding Company (NOFHC) was to be brought down to 40% within three years from August 2015. However, the NOFHC was unable to adhere to the condition and currently holds ~82% in the bank. In a communication to the bank, the RBI has said the general permission to open new branches stands withdrawn while new branches could be opened with RBI approval. In addition, the regulator has mandated to freeze the remuneration of the MD & CEO at the existing level (| 2.4 crore...

ICICI Securities Ltd | Retail Equity Research Bandhan started as Bandhan Konnagar, a non-governmental organisation (NGO) in 2001 providing microfinance services to socially and economically disadvantaged women in rural West Bengal. On April 9, 2014, RBI granted an in-principle approval to Bandhan Financial Services (BFSL) to set up a scheduled commercial bank. Bandhan Bank has demonstrated stellar advances growth at ~51% CAGR in the last five years despite AP crisis and demonetisation. Continued focus on...

report strong profitability net profits to grow at a CAGR of 39% over FY18-21E. Return profile is also estimated to be robust ROE/ROA 19%/3.7 over the next 2 yrs. Although valuations looks expensive (trading at 6.8x FY19E and 5.2x FY20E...

ICICI Securities Ltd | Retail Equity Research Advances growth continued to remain robust at 52% YoY to | 32590 crore, above our estimate. Micro loans (forms 85.8% of advances) grew 44.8% YoY to | 27979 crore while non micro loans rose 127% YoY from | 2068 crore in Q1FY18 to | 4614 crore in Q1FY19 NII increase was higher than estimate at 39.5% YoY to | 1037 crore led by robust growth in AUM and strong margins at ~10.27%. On a sequential basis, NIM increased ~100 bps from 9.3% in Q4FY18 to...

Bandhan's 1QFY19 results indicate strong momentum across all fronts (loan growth 52% YoY, deposits 37% YoY, earnings 47.5% YoY) as well as stability across key qualitative parameters (GNPLs flat QoQ, cost-income ratio 34.2%, down 140bps YoY). Microbanking loan book grew 45% YoY, while other retail loans were up 123% YoY on a low base. CASA deposits were up 84% YoY, with CASA ratio of 35.5%. NIMs benefitted from the recent capital raise to expand to 10.3% and Tier1 ratio now stands at 31.4%. Nonmicrobanking assets are now 14.2% of the loan mix. The bank added 0.39mn microbanking customers (+4.7% growth) and 0.25mn retail banking customers (11% growth). We upgrade our earnings estimates by 2%/5% for FY19/20 resulting into a revised TP of INR650...

Bandana Bank, despite being a former micro-finance players and considering the impact of demonetization, posted the lowest NPAs amongst scheduled commercial banks with a GNPA ratio of 1.25% & NNPA ratio of 0.58% as on 31st March 2018 . In absolute terms, gross NPA were `373.14 core compared with `86.26 cores and Net NPA stood at `172.90 core against `61.17 cores. However,...

Bandhan Bank, despite being a former micro-finance players and considering the impact of demonetization, posted the lowest NPAs amongst scheduled commercial banks with a GNPA ratio of 1.25% & NNPA ratio of 0.58% as on 31st March 2018. In absolute terms, gross NPA were ` 373.14 crore compared with ` 86.26 crores and Net NPA stood at ` 172.90 crore against ` 61.17 crores. However, on a sequential basis, Bank witnessed stable growth and reduction in bad loans with gross NPA ratio down from 1.67 % in the third quarter ending December 2017 Bank has taken various initiative too closely monitor asset quality, and expects asset quality to further improve and credit cost to decline in FY2019. The bank has been making provision at the higher rate of 1% for standard advances against the...

Bandhan Bank Ltd is a newly licensed commercial bank transformed from a microfinance in August 2015. Currently the bank has a network of 887 branches and 430 ATMs, remarkable growth within a short span of time. They largely focusing on serving underpenetrated and underbanked rural markets of India. As on 9MFY18, the bank's net advances stood at Rs22,931cr against Rs12,438cr in FY16. On the liability side the bank has build a strong base of current account and savings account deposits with a healthy CASA ratio of 33.2%. The company...