Bandhan Bank’s FY26 Roadmap: 15–17% AUM Growth Driven by Secured Loans, Recovery Initiatives & Retail Expansion

Bandhan Bank Sets Ambitious Growth Target of 15–17% AUM for FY26

Bandhan Bank has announced a bold growth roadmap for FY26, aiming to achieve 15–17% growth in Assets Under Management (AUM). The strategy is centered around strengthening secured lending, improving recovery processes, and enhancing asset quality, signaling the bank’s intent to regain momentum after a challenging FY25.

Key Strategic Moves Driving Growth

1. Shift Towards Secured Lending

   • Bandhan Bank’s secured loan portfolio has already crossed 52%, surpassing its FY27 target of 55%.

   • This strategic rebalancing is expected to boost stability and reduce overall credit risk.

2. Improved Recovery & Asset Quality

   • Credit cost reduced to 3.5% from 3.9% in the previous quarter.

   • Slippages in the Emerging Entrepreneurs Business (EEB) microfinance segment fell to ₹10.89 billion, with ₹9.5 billion written off.

   • Collection efficiency stood at a healthy 97.6%, reflecting operational resilience.

3. Operational Enhancements

   • The bank introduced QR-code enabled remote payments and advance collections during holidays, ensuring better repayment efficiency.

   • While disbursements in the EEB portfolio slowed due to regulatory guardrails, the bank expects stronger traction in the coming quarters.

4. Diversification Beyond Microfinance

   • With regulators allowing up to 40% lending in non-MFI segments, Bandhan Bank is expanding into retail, housing, and small business loans.

   • A syndicated lending deal has also added a new fee-based income stream.

Financial Snapshot (Q1 FY26)

• Net Profit (PAT): ₹372 crore (down 65% YoY due to higher provisioning)
• Deposits: ₹1.55 lakh crore (+16% YoY), with retail deposits forming 68% of the mix
• Gross NPA: 5.0% | Net NPA: 1.4% | Capital Adequacy Ratio (CAR): 19.4%

Outlook for FY26

While the EEB segment is projected to grow at 5–8% due to regulatory limitations, Bandhan Bank is betting on secured loans and broader retail lending to drive its overall AUM growth of 15–17%. With asset quality on a recovery path and stronger collection mechanisms in place, the bank is well-positioned to stabilize margins and restore profitability.

Conclusion

Bandhan Bank’s FY26 growth plan highlights a strategic shift from microfinance dependency towards secured and diversified lending. By focusing on asset quality, operational efficiency, and digital-driven recovery processes, the bank aims to strengthen its balance sheet and achieve sustainable growth.

For investors and stakeholders, the coming quarters will be crucial in determining how well the bank executes its ambitious roadmap.