Private sector lender Bandhan Bank is expecting its credit cost to improve to nearly 2% by the end of current financial year from 2.5% as of June end, MD & CEO C.S. Ghosh tells Piyush Shukla in an interview. Ghosh shares business guidance for the current fiscal and his views on recent exits of CFO and chief compliance officer from the bank. Edited excerpts:
Your GNPAs rose to 7.3% in Q2 from 6.8% in Q1. What is your guidance on asset quality for H2FY24?
During the first half of the fiscal, there is always a seasonality effect, and accordingly some slippages happen. If you compare current figures (GNPA) with last quarter, it is a very marginal increase. During the current financial year, we will like credit cost to touch 2%, plus 20 basis points.
Will you trim emerging entrepreneurs business loans due to higher NPAs?
The country is very large and many people need money. Though it is a small ticket size loan and reaching out to them is very challenging, we have already developed expertise in the bank as a microfinance entity first and in the period since. The bank, accordingly, is very happy to continue growth of this segment along with the others
Your Q2 credit growth was lower than peer private banks. What is growth outlook for H2?
We have typically seen higher credit growth coming in the second half of the financial year, not in first half. According to the trend that we have seen so far in September, a 20% year-on-year (YoY) credit growth can be achieved in this financial year.
Your guidance on deposit growth?
Deposit growth always is aligned with the credit growth. We would like to maintain credit-deposit (CD) ratio at 96%-97% level. On that basis, credit growth will be aligned.
What efforts did you put to increase CASA book on QoQ basis?
From the beginning of the bank, we have always been focusing on CASA and retail deposits. We have a good franchise which has aided CASA growth. Regionally, we would like to reach more people. We are thus opening more branches. Right now we have 1600 branches which will rise to 1700 in this financial year. And going ahead, each fical we will open about 120 to 150 branches. This will help us to continue this type of CASA growth in the bank.
Will CASA ratio reach FY23 level of 41% by end of FY24?
If you see during the last quarter, it was in 36% range. This quarter it has increased by 2.5%. So, I hope that by this financial year end, it will reach 40%.
There have been senior level exits at bank during H1. Is there a strategy to retain officials?
There is only CFO (who has exited). And the bank is under process to recruit the new CFO. Whenever they will be appointed, we will inform. Other than this, all senior management team members are working with us. And they are very committed to work.
Any timeline on when will the new CFO be appointed?
No, it is under process.