Bandhan Bank’s entry into credit cards has received a warm response from the Street. The stock is up about 4.5% in the past two trading sessions after the lender launched four Mastercard variants on Tuesday.
The timing is favourable. Credit growth in the banking industry has accelerated sharply, while unsecured lending is showing signs of recovery after the RBI’s 2023 tightening moderated growth.
Meanwhile, secured advances have risen to 56.8% of the book from 52.1% a year ago and are reportedly targeted at 60% of the book eventually.
Bandhan’s credit-card, or unsecured, foray represents a parallel move: de-risking the core loan book while selectively adding higher-yielding retail products such as credit cards. The improvement in asset quality over recent quarters makes the latter easier to contemplate.
Credit cost has halved year-on-year to 1.8% in Q1FY27, with management’s FY27 guidance of 1.6-1.8% leaving the door open for further improvement. Gross non-performing assets (NPA) have fallen to 3.1% from 5% in Q1FY26.