Bandhan Bank shares in focus as board okays Rs 304 crore NPA portfolio sale

Shares of Bandhan Bank Ltd are in focus on Tuesday after the private lender post market hours of Monday said its board has approved the proposal for sale of identified Non-Performing Assets (NPA) with more than 180 days past due (DPD), pertaining to the housing finance portfolio of the bank, having principal outstanding amounting to Rs 303.74 crore, as on May 31, 2026. The same would be carried out through a bidding process with Asset Reconstruction Companies (ARC), Bandhan Bank said, adding that the bank will go for bidding as per Swiss Challenge method for sale of the aforesaid NPA portfolio.

The stock rose 0.57 per cent to Rs 212.10 apiece at open. SBI Securities said the development is positive for short-to-medium term. 

Bandhan Bank recently announced in line March quarter earnings, led by  lower-than-expected credit costs and stable growth and operating outcomes. Deposit growth at 10 per cent YoY lagged credit growth, even as CASA ratio improved significantly to 29.3 per cent, owing to seasonality in current account balances. Overall, it gross NPAs stood at 3.3 per cent.

At its earnings call, the management on NPA sale said: "I think the two other factors, the NPA, the slippages have come down. The collection efficiency has picked up. The ARC sale that we did in Q3 prior to that we did 3 years ago. So, it's not something that will be done every quarter. This is an option that is available for the bank. And we will look at it whenever we need to do any kind of an NPA management, but there are no immediate plans as of now," it said.

For the March quarter, slippages and credit costs were lower for Bandhan Bank with the MFI stress gradually reducing. "Bandhan Bank continues to guide for a shift in its loan mix toward secured loans, improving
the quality of its deposit franchise, and further tightening its underwriting and compliance. We believe BANDHAN’s path to regain regulatory credibility and achieve portfolio stability is likely to be protracted," HDFC Securities said in a Q4 review note.

Elara Securities in a recent note on banking sector said despite challenges and near-term uncertainties, trends are resilient for MSMEs. Dislocations via elevated costs, logistics pressures and tighter working capital cycles, will continue to be the key monitorables going ahead, the domestic brokerage said while suggesting 'Accumulate' rating on Bandhan Bank with a target of Rs 220.