Amid changing market conditions, Bandhan Bank is recalibrating its loan portfolio to reduce dependence on microfinance and strengthen secured lending. The bank is targeting a 60% secured and 40% unsecured mix, with microfinance expected to stabilise at 30–33% of the total loan book over the next 1–3 years, according to CFO Rajeev Mantri.
The transition is already visible. The secured portfolio has grown from around 42% in March 2024 to nearly 57% by December 2025. This shift is driven by expansion in housing, retail assets, and wholesale banking. Microfinance exposure has been gradually reduced, with the EEB share declining from 42.5% in December 2024 to 34.5% in December 2025. Earlier, the bank had nearly 80% exposure to microfinance before the pandemic.
On asset quality, the bank expects credit costs to improve significantly. Following the sale of ₹3,200 crore of NPAs to ARCs in Q3 FY26, credit costs declined from about 4.1% a year ago to 3.3% in the latest quarter. The lender expects this to further drop to 1.6–1.7% by FY27. “We expect the credit cost for the bank to come down to somewhere between 1.6 and 1.7 per cent by the end of FY27,” said Rajeev Mantri, adding that microfinance will carry around 3% credit cost while the secured portfolio will be closer to 1%.
The bank is also cautiously expanding its corporate lending portfolio, including exposure to large groups like Tata Group and JSW Group, while maintaining limited ticket sizes and strict risk controls. Wholesale banking contributes about 31% of advances, largely focused on mid-market and SMEs. Margins improved from 5.8% in Q2 to 5.9% in Q3, with an expected 30–40 basis points increase as deposits reprice, targeting a NIM of 6.4–6.5% by FY27. Technology investments remain a priority, with 7–8% of operating expenditure allocated to IT, including digital platforms, loan systems, and AI-led initiatives to enhance efficiency and customer experience.
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