Bandhan Bank is “working on a strategy” to increase the share of non-microfinance-based lending to the total loan book to 50 per cent in the next three years. The bank will focus on affordable housing, credit cards, and personal loans to boost its retail loan book.

Non-microcredit loans currently account for nearly 39 per cent of the bank’s total advances, which stood at around ₹65,456 crore as on December 31, 2019.

Growth strategy

The bank, which is set to complete five years of operations in August this year, is looking to come up with a growth strategy for the next five years. “The first five years we were basically on the learning curve and garnered sufficient experience and built a strong base.

“Now, we will move into the growth curve and focus on areas to grow our businesses. We expect the share of non-microcredit portfolio to increase to 50 per cent in the next three years,” Chandra Shekhar Ghosh, MD and CEO, Bandhan Bank, told BusinessLine .

The merger of Gruh Finance will help enable the bank grow the affordable housing business. “We have got Gruh’s systems and skills, and we are now looking to penetrate deeper into affordable housing business,” he said.

Last year, the bank entered into a tie-up with Standard Chartered Bank for launching a co-branded credit card. According to Ghosh, the systems have been put in place and it now plans to grow the business.

Apart from housing and credit card, the bank also plans to push personal loans to shore up its retail portfolio. This apart, it will also focus on MSMEs. Some of its existing microcredit borrowers have been upgrading to MSME customers and it would continue to support these customers.

While the banking industry has been complaining about a slowdown in credit demand, particularly from corporate borrowers, Bandhan Bank says it has been witnessing “good demand” for credit from across various segments.

The bank had registered 30 per cent growth in credit in the October to December 2019 quarter on a year-on-year basis. Moving forward, it is hopeful of being able to maintain the growth momentum.

Expanding footprint

Days after the RBI lifted restrictions on the bank to open branches, Bandhan Bank, on Wednesday, announced that it has opened 125 banking outlets across 15 States, taking the total branch strength to 1,013. Together with a network of 3,206 banking units and the 195 home loan service centres, the total number of banking outlets currently stands at 4,414.

The RBI had, in 2018, barred the bank from opening new branches without prior approval. It had also ordered it to freeze Ghosh’s salary at the existing level over its failure to meet shareholding rules of reducing promoters’ stake.

However, following the completion of the merger of Gruh Finance, the promoters’ stake has come down to 61 per cent from 82 per cent.

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