Poor man's bank Bandhan now sets eyes on the rich

14 May 2016


Formerly a micro-finance institution, Bandhan has opened a dedicated branch for high networth individuals (HNIs) at Kolkata's posh Park Street, marking its entry into the more lucrative segment.

Bandhan Bank, which started off as a bank to serve millions of poor families in the country's remote and backward areas, providing small loans, is now eyeing high networth individuals (HNIs) for business.

While the Park Street branch is Bandhan's first dedicated branch for HNIs, the bank plans to open similar branches in other metros as well.

"Based on our experiences at our Park Street Branch, we plan to open similar branches in other metros in other cities as well including another one in Kolkata," Bandhan Bank CEO Chandrashekhar Ghosh said while inaugurating the branch.

Bandhan recently roped in  former retail head of DBS Bank Rahul Johri as executive president and head of general and micro banking, in order to expand its reach among the high networth clients.

Bandhan will also be launching wealth management services for high networth individuals and groups, reports quoted Johri as saying.

Bandhan originally set up by Chandra Sekhar Ghosh as a micro-financier, transformed itself into a full-fledged bank in August 2015, under the Reserve Bank's policy of promoting alternative banking to suit the changing times.

Bandhan and IDFC were granted banking licence in 2014 and Bandhan announced its maturing into a full-fledged bank in August 2015.

In its first year of operation, in FY16, Bandhan Bank earned a net profit of Rs275.25 crore on a total income base of Rs1,731.25 crore, giving an earning per share of Rs3.40.

Bandhan Bank has garnered deposits of Rs13,000 crore, Ghosh said, adding, "Our deposit base is now Rs13,000 crore. The loan book size is Rs15,200 crore."

Its net non-performing assets stood at Rs10.23 crore with a net NPA ratio of 0.08%, the bank disclosed in a filing made to the stock exchanges.

While Bandhan is in a better position in terms of non-performing loans, the bank is stuck to its comfort zone by lending small amounts to its ever-growing customers for tiny loans.

But, eight months into the life of the new bank, Bandhan has started feeling the need for larger cash flows to grow faster.

"With a loan portfolio of Rs15,200 crore, we have a credit deposit ratio of well over 100 per cent," Ghosh pointed out.

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