Bandhan Bank - Asset Quality To Normalise From FY24; Business Diversification Is Key: Motilal Oswal

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A Bandhan Bank branch and ATM in Kolkata. (Source: bank's website)

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Motilal Oswal Report

At Bandhan Bank Ltd.'s analyst day, the management spelt out its plans to diversify in terms of product and geographical mix.

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Asset quality-related issues are likely to peak in Q3, but should normalise from Q4 FY23. Mix in the micro finance institution business is likely to moderate gradually as other segments gain scale.

Overall, Bandhan Bank expects credit cost to normalise by ~1.8%, with steady state return on asset of ~3% (up/down 15 basis points), even as the cost-to-assets ratio remains slightly higher due to investment in new businesses and branch expansion.

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