Bandhan Bank Targets 15-16% Loan Book Growth In FY26 Led By Secured Lending

Bandhan Bank, one of India’s leading microfinance lenders, is targeting a growth of 15% to 16% in its loan book in both FY26 and FY27, according to MD and CEO Partha Pratim Sengupta.

A key aspect of this growth will be a shift towards secured lending, according to the top executive.  

“We are moving towards secured books. My secured books have gone up from 48-50% to 52%.  We have made our strategy up to FY27. So in FY26, overall book will grow by 15% to 16% and in FY27, also 15-16%,” he said during a conversation with NDTV Profit on Monday.

The bank is targeting a growth of 8% to 10% in the microfinance segment in FY26. 

“In microfinance, the guidance will be 8% to 10%. So, aggressively, what we have been doing in the past, we will not do. We will keep that moderate guidance for the year,” he said.

Sengupta reiterated the bank’s full-year guidance on credit cost of 2.5%, with an expected 3% in Q2. It can potentially taper to 2% by Q4.

“The delinquencies are coming down. The SMA 2 (Special Mention Account) book is coming down. This trend continues for the day. And with new disbursements, new advances, I would say that this credit cost will definitely improve,” Sengupta underlined.

SMA 2 refers to loans that have been overdue for 61-90 days.

The bank’s net interest margins (NIMs) are expected to face moderation due to rising funding costs.

“We passed on a 25-basis-point rate hike last quarter and an additional 75 basis points from July,” Sengupta added. 

However, he pointed out mitigating factors such as a 50% fixed-rate loan book, which shields the bank from immediate rate impacts and a 19-basis-point reduction in deposit costs in Q1.

Bandhan Bank reported a steep 65% year-on-year (YoY) drop in profit to Rs 372 crore in Q1FY26 from Rs 1,063 crore in Q1FY25. Total income rose 2% YoY to Rs 6,201.5 crore in Q1FY26 from Rs 6,081.73 crore in the year-ago period. Total Expenditure, excluding provisions and contingencies, increased 9.5% YoY to Rs 4,533.1 crore in Q1FY26 from Rs 4,140.84 crore in Q1FY25. 

Sengupta noted that new regulatory guidelines imposed from April 1 have impacted the entire industry, leading to muted growth in advances. 

"The good thing is that the delinquency has been a little bit controlled. The slippages have come down," the top executive said.

Shares of Bandhan Bank were trading 2.36% lower at Rs 182.61 apiece on the NSE on Monday. In comparison, the benchmark Nifty50 settled 0.49% higher at 25,090.7.