After three painful quarters, Bank Bandhan Investors Ltd is scheduled some cheerful and it seems to have come now.

Microfinance companies – changed banks managed to show a significant increase in the key growth metrics for the March quarter. So far, FY22 will be much better than the previous year.

In the initial update in the fourth quarter of FY22 to exchange on April 5, Bank Bandhan said loan growth in the January-March period increased to 16 percent year-on-year. This is a big increase of growth of 9.6 percent for Q3FY22.

Distribution has increased because most of the restrictions made to curb the spread of Coronavirus have now been raised throughout the country.

To ensure, the source of loan growth will be the main thing to pay attention. Micro-Finance is still more than half of Bank Bandhan loans and lenders want to reduce this to 30 percent in its efforts to diversify.

Broad-based growth

Analyst believes in broad-based growth, with microfinance and non-microfinance contributes. In the December quarter, microfinual finance books have shown 22 percent growth, housing loans grew approximately 7 percent and loans for small businesses grew by 25 percent.

Bank Bandhan’s need for diversification can be understood as a micro loan has become the biggest source of delinquency during a pandemic. Lenders see more than 10 percent of their loan books become bad for the December quarter. It also has to restructure a portion of the loan to help tide borrowers on difficult times.

But with economic activity taking, the prospect of the quality of the asset looks promising. The collection efficiency returns to the pre-covid level, according to the bank.

“Increasing trends in the efficiency of collection must continue to moderate credit costs and income support,” Write analysts in Motilal Oswal Financial Services Ltd. in a note. Brokerage companies expect banks to provide 25 percent growth as a return on equity by FY24.

Good purchase

This brings us to the latest purchases of the Idfc Asset Management Company (AMC) Ltd by Parent Bandhan Financial Holdings (BFH) Ltd Addition of AMC to bring groups closer to the aim of having financial products and mutual funding insurance in the cat.

Given that the group has sufficient liquidity, the purchase is a mining value. However, for this bank it is an opportunity to increase the income of costs through the cross-sales of mutual fund products, show analyst at Jefferies India Pvt Ltd.

Part of non-interest income in the overall bank’s revenue is less than 25 percent. The entry of the AMC IDFC into the group can increase this share. BFH is part of the consortium and purchase of housing funds will take more than six months subject to regulatory approval.

Bandhan Bank’s performance has provided enough investor reasons to encourage inventory. Stock has surpassed the broad market in the past month with a 23 percent star increase.

At 1.01 a.m., the stock traded at Rs 320.65, up Rs 5.65, or 1.8 percent, at NSE.