Kolkata, Apr 30 (PTI) Bandhan Bank will undergo a strategic business rebalancing over the next two-three years, aiming to reduce its reliance on unsecured microfinance loans under the Emerging Entrepreneurs Business (EEB) segment and shift towards a more secured loan portfolio, a top company official said.

The bank plans to bring down the EEB loan share from 42 per cent to 35 per cent of its total advances, while increasing the share of secured loans, currently at 42 per cent.

The realignment is expected to lower its net interest margin (NIM) by about 50 basis points to 6.1-6.2 per cent from 6.7 per cent recorded in the March quarter.

EEB is a high-margin unsecured loan product.

“The EEB business stress is expected to ease from the second quarter of the current fiscal. We want the EEB share of our loan exposure to be around 35 per cent, while raising the secured lending share,” Managing Director and CEO Partha Pratim Sengupta said.

He said the lender is targeting 15-17 per cent credit growth over the next two-three years, and is innovating its product portfolio to support this shift.

Bandhan Bank on Wednesday reported a more than five-fold increase in its net profit for the quarter ended March 31 at Rs 318 crore, compared to Rs 55 crore in the year-ago period, driven by lower provisions despite a decline in net interest income.

The lender's net revenue in the reporting quarter stood at Rs 3,456 crore, marginally lower than Rs 3,560 crore in the corresponding quarter of the previous year. PTI BSM RBT

Loan portfolio rebalancing shifts bank from unsecured microfinance toward secured lending, reducing margin and EEB exposure. Bandhan Bank will rebalance its loan portfolio over two to three years, reducing the EEB unsecured loan share from 42 per cent to 35 per cent and increasing secured lending, while targeting 15-17 per cent credit growth and innovating product offerings. The shift is expected to lower net interest margin by about fifty basis points to roughly 6.1-6.2 per cent as high margin EEB exposure is replaced by lower margin secured assets; management expects EEB stress to ease in the near term.