Is Bandhan Bank’s Credit Cost Set to Improve by FY27?
About the Latest Update
Bandhan Bank has indicated that credit cost is expected to sequentially improve to around 1.7% by the end of FY27.
The bank has also stated that slippages have shown improvement, signaling stabilization in asset quality trends.
Improvement in credit cost directly impacts profitability, return ratios and investor confidence, especially for banks operating in microfinance-heavy portfolios.
Key Highlights
🔹 Credit cost guided to improve sequentially to 1.7% by end of FY27.
🔹 Management indicates visible improvement in slippages.
🔹 Asset quality trajectory showing stabilization signs.
Lower credit cost typically enhances net interest margins expansion potential and reduces provisioning pressure. Traders often align exposure using structured approaches such as Nifty Trade Insight when banking stocks drive index direction.
Why This Matters for Investors
| Factor | Impact |
|---|---|
| Lower Credit Cost | Improves profitability and ROA/ROE |
| Reduced Slippages | Strengthens balance sheet stability |
| Provisioning Trend | Potential earnings visibility improvement |
Positive Signals🔹 Sequential credit cost moderation 🔹 Improved slippage metrics 🔹 Asset quality stabilization |
Monitoring Points🔹 Rural credit environment 🔹 Collection efficiency trends 🔹 Regulatory developments |
Valuation & Strategic View
If asset quality continues to improve and credit cost declines toward 1.7%, earnings visibility may strengthen into FY27.
Index traders tracking banking momentum may use BankNifty Trade Insight structures during sector-led moves.
Investor Takeaway: Derivative Pro & Nifty Expert Gulshan Khera, CFP®, notes that sustained reduction in credit cost is a key re-rating trigger for lenders. Investors should monitor quarterly slippage data and provisioning trends for confirmation. Access disciplined market frameworks at Indian-Share-Tips.com, which is a SEBI Registered Advisory Services.
SEBI Disclaimer: The information provided in this post is for informational purposes only and should not be construed as investment advice. Readers must perform their own due diligence and consult a registered investment advisor before making any investment decisions. The views expressed are general in nature and may not suit individual investment objectives or financial situations.
