BANDHAN BANK LTD Q2 CONCALL: FY27 LOAN GROWTH GUIDANCE OF 14%, NIM TARGET OF 6.1–6.2%, FY27 EXIT ROA TARGET OF 1.2–1.4% \& MICROFINANCE RECOVERY SUPPORTING PROFITABILITY

• MANAGEMENT EXPECTS APPROXIMATELY 14% LOAN BOOK GROWTH IN FY27, SUPPORTED BY SECURED RETAIL LENDING, WHOLESALE BANKING \& GRADUAL MICROFINANCE RECOVERY • MANAGEMENT TARGETS DEPOSIT GROWTH ABOVE LOAN GROWTH TO STRENGTHEN FUNDING STABILITY, IMPROVE LIQUIDITY \& SUPPORT BALANCE-SHEET EXPANSION • MANAGEMENT EXPECTS NET INTEREST MARGINS TO REMAIN AROUND 6.1–6.2%, SUBJECT TO DEPOSIT PRICING, FUNDING MIX \& LENDING YIELDS • MANAGEMENT TARGETS AN FY27 EXIT RETURN ON ASSETS OF APPROXIMATELY 1.2–1.4%, SUPPORTED BY IMPROVING OPERATING PROFITABILITY \& STABILIZING CREDIT COSTS • MANAGEMENT ASPIRES TO ACHIEVE A MEDIUM-TERM RETURN ON ASSETS OF APPROXIMATELY 1.6–1.8%, SUBJECT TO ASSET QUALITY \& OPERATING EFFICIENCY • MANAGEMENT EXPECTS MICROFINANCE PORTFOLIO GROWTH OF APPROXIMATELY 8–10% AS COLLECTION EFFICIENCY IMPROVES \& LENDING MOMENTUM RECOVERS IN H2 FY27 • MANAGEMENT INTENDS TO MAINTAIN DISCIPLINED MICROFINANCE UNDERWRITING RATHER THAN ACCELERATING GROWTH AT THE EXPENSE OF ASSET QUALITY • MANAGEMENT EXPECTS THE SECURED LOAN PORTFOLIO TO CONTINUE GAINING SHARE, REDUCING DEPENDENCE ON UNSECURED MICROFINANCE EXPOSURE • MANAGEMENT EXPECTS OPERATING EXPENSES TO REMAIN AROUND 4.2% OF ASSETS, WHILE CONTINUING INVESTMENTS IN TECHNOLOGY \& DISTRIBUTION • MANAGEMENT INDICATED CREDIT COSTS COULD IMPROVE TOWARD APPROXIMATELY 1.7%, COMPARED WITH 1.8% IN Q2 FY27, SUBJECT TO DELINQUENCY TRENDS • MANAGEMENT EXPECTS PRIORITY SECTOR LENDING CERTIFICATE COSTS OF APPROXIMATELY ₹120 CR IN FY27 • MANAGEMENT TARGETS APPROXIMATELY ZERO PSLC COSTS IN FY28, SUPPORTED BY IMPROVEMENTS IN THE BANK'S PRIORITY SECTOR LENDING PROFILE • MANAGEMENT EXPECTS HOUSING FINANCE GROWTH TO IMPROVE FROM Q4 FY27 FOLLOWING RESTRUCTURING OF ITS OPERATING MODEL • MANAGEMENT EXPECTS NEWER RETAIL LENDING BUSINESSES TO POTENTIALLY ACHIEVE POSITIVE RETURN ON EQUITY WITHIN APPROXIMATELY 2–3 QUARTERS • MANAGEMENT EXPECTS NEW CREDIT CARD PRODUCTS TO SUPPORT CUSTOMER ACQUISITION, SALARY ACCOUNT RELATIONSHIPS \& FEE-BASED INCOME • MANAGEMENT PLANS TO EXPAND FEE INCOME THROUGH CREDIT CARDS, MUTUAL FUNDS, FOREX SERVICES, TRADE FINANCE \& THIRD-PARTY DISTRIBUTION • MANAGEMENT AIMS TO REBUILD CASA THROUGH DIGITAL BANKING, SALARY ACCOUNTS \& DEEPER CUSTOMER RELATIONSHIPS • MANAGEMENT EXPECTS RETAIL DEPOSIT MOBILIZATION TO REMAIN A KEY PRIORITY, WITH LOWER DEPENDENCE ON INTEREST-RATE-SENSITIVE FUNDING OVER TIME • MANAGEMENT DESCRIBED THE QUARTERLY INCREASE IN BULK DEPOSITS \& REDUCTION IN BORROWINGS AS A FUNDING-COST OPTIMIZATION EXERCISE RATHER THAN A PERMANENT WHOLESALE FUNDING SHIFT • MANAGEMENT EXPECTS MICROFINANCE COLLECTION EFFICIENCY TO REMAIN STRONG, SUPPORTED BY IMPROVING PERFORMANCE OF NEWER LOAN VINTAGES • MANAGEMENT INDICATED THAT NORMALIZED NET SLIPPAGES IMPROVED APPROXIMATELY 14% SEQUENTIALLY AFTER ADJUSTING FOR AN ARC RECOVERY IN Q1 • MANAGEMENT DOES NOT CURRENTLY EXPECT ASSAM FLOOD-RELATED DISRUPTIONS TO HAVE A MATERIAL PORTFOLIO-WIDE IMPACT, ALTHOUGH COLLECTIONS REMAIN UNDER MONITORING • MANAGEMENT ESTIMATED AN INITIAL EXPECTED CREDIT LOSS TRANSITION IMPACT OF APPROXIMATELY ₹2,200 CR, BASED ON THE MARCH 2026 LOAN PORTFOLIO • MANAGEMENT EXPECTS THE INITIAL ECL TRANSITION ADJUSTMENT TO AFFECT CAPITAL RATHER THAN IMMEDIATELY FLOWING THROUGH THE PROFIT \& LOSS ACCOUNT • MANAGEMENT REFERRED TO A FIVE-YEAR REGULATORY TRANSITION WINDOW FOR IMPLEMENTATION OF THE ECL FRAMEWORK • MANAGEMENT ESTIMATED AN ONGOING ECL IMPACT OF APPROXIMATELY 15–20 BASIS POINTS ON A QUARTERLY BASIS, SUBJECT TO FINAL REGULATORY REQUIREMENTS • MANAGEMENT EXPECTS THE ULTIMATE ECL TRANSITION IMPACT COULD DECLINE IF DELINQUENCY INDICATORS IMPROVE BEFORE IMPLEMENTATION • MANAGEMENT CLARIFIED THAT THE ₹2,200 CR ECL ESTIMATE IS PRELIMINARY \& MAY CHANGE WITH PORTFOLIO QUALITY \& REGULATORY IMPLEMENTATION • Q2 FY27 NET INTEREST INCOME INCREASED 14.5% YOY TO ₹2,960 CR, SUPPORTED BY HEALTHY LOAN GROWTH • Q2 FY27 NET PROFIT INCREASED TO ₹622 CR, APPROXIMATELY 5.5 TIMES THE YEAR-AGO LEVEL • Q2 OPERATING PROFIT INCREASED 18.8% YOY TO ₹1,556 CR, REFLECTING IMPROVING CORE OPERATING PERFORMANCE • Q2 NET TOTAL INCOME REACHED ₹3,665 CR, WHILE OPERATING EXPENSES STOOD AT ₹2,109 CR • Q2 NET INTEREST MARGIN STOOD AT 6.1%, COMPARED WITH 6.2% IN Q1 FY27 • Q2 RETURN ON ASSETS STOOD AT 1.2%, WHILE RETURN ON EQUITY REACHED 9.3% • H1 FY27 NET INTEREST INCOME REACHED ₹5,881 CR, WITH NET TOTAL REVENUE OF ₹7,190 CR • H1 OPERATING PROFIT STOOD AT ₹2,915 CR, WHILE NET PROFIT INCREASED 132% YOY TO ₹1,123 CR • H1 RETURN ON ASSETS STOOD AT 1.1%, WITH RETURN ON EQUITY OF APPROXIMATELY 8.5% • GROSS LOAN BOOK INCREASED 13.1% YOY TO APPROXIMATELY ₹1.58 LAKH CR • NON-MICROFINANCE LOANS GREW 19.8% YOY \& CONTRIBUTED APPROXIMATELY 66.7% OF TOTAL ADVANCES • SECURED ADVANCES INCREASED 18% YOY, WITH THEIR SHARE OF THE LOAN BOOK RISING TO 57.3% FROM 54.9% • RETAIL ASSETS GREW 41.9% YOY, SUPPORTED BY COMMERCIAL VEHICLES, CONSTRUCTION EQUIPMENT, AUTO LOANS \& GOLD LOANS • WHOLESALE BANKING ADVANCES INCREASED 31.6% YOY, SUPPORTING LOAN PORTFOLIO DIVERSIFICATION • MICROFINANCE / EEB LOAN BOOK GREW 1.7% YOY TO APPROXIMATELY ₹52,616 CR, REFLECTING A CAUTIOUS GROWTH STRATEGY • TOTAL DEPOSITS INCREASED 9.2% YOY \& 4.7% QOQ TO APPROXIMATELY ₹1.73 LAKH CR • RETAIL DEPOSITS INCREASED 11.9% YOY \& CONTRIBUTED 72.7% OF TOTAL DEPOSITS • RETAIL TERM DEPOSITS INCREASED 16.8% YOY, REFLECTING CONTINUED MOBILIZATION OF STABLE CUSTOMER FUNDING • CASA DEPOSITS STOOD AT ₹46,132 CR, WITH THE CASA RATIO AT 26.7%, REMAINING AN IMPORTANT FUNDING-COST CONCERN • CURRENT ACCOUNT BALANCES INCREASED 36.9% YOY \& 18.2% QOQ, PARTLY OFFSETTING WEAKNESS IN SAVINGS ACCOUNT BALANCES • MANAGEMENT ATTRIBUTED SEQUENTIAL SAVINGS ACCOUNT WEAKNESS PARTLY TO LOWER DEPOSIT INTEREST RATES \& TIMING OF GOVERNMENT-RELATED DEPOSIT FLOWS • BULK DEPOSITS INCREASED APPROXIMATELY ₹4,300 CR DURING Q2, WHILE BORROWINGS DECLINED BY AROUND ₹3,400 CR • NET CREDIT-DEPOSIT RATIO STOOD AT APPROXIMATELY 89.5%, HIGHLIGHTING THE IMPORTANCE OF DEPOSIT GROWTH • EEB COLLECTION EFFICIENCY IMPROVED TO 99.3% FROM 98.9% IN Q1, WHILE BANK-LEVEL COLLECTION EFFICIENCY STOOD AT 99.4% • EEB EARLY-DELINQUENCY POOL DECLINED TO 2.9% FROM 3.5%, WITH ITS VALUE REDUCING TO ₹1,529 CR FROM ₹1,842 CR • EEB SLIPPAGES STOOD AT APPROXIMATELY ₹655 CR DURING Q2 • GROSS NPA RATIO STOOD AT 3.1%, WHILE NET NPA RATIO REMAINED AT 0.9% • Q2 GROSS SLIPPAGES REACHED ₹1,125 CR, COMPARED WITH ₹1,079 CR IN Q1 • RECOVERIES \& UPGRADES IMPROVED TO ₹481 CR FROM ₹449 CR IN Q1 • Q2 WRITE-OFFS STOOD AT ₹607 CR, INCLUDING APPROXIMATELY ₹424 CR RELATED TO THE EEB PORTFOLIO • PROVISION COVERAGE RATIO STOOD AT 71.2%, INCREASING TO 74.3% INCLUDING SECURITY RECEIPT PROVISIONS • APPROXIMATELY ₹406 CR OF LOANS ACROSS FOUR ASSAM FLOOD-AFFECTED DISTRICTS WERE PLACED UNDER MORATORIUM, WITH AN ADDITIONAL 5% PROVISION • MANAGEMENT REPORTED THAT MORE THAN 96% OF THE ASSAM FLOOD-AFFECTED PORTFOLIO REMAINED STANDARD, WITH COLLECTION EFFICIENCY OF APPROXIMATELY 99.1% • PROCESSING FEE INCOME INCREASED APPROXIMATELY 30% YOY, WHILE THIRD-PARTY DISTRIBUTION INCOME GREW 26% • THE BANK LAUNCHED FOUR CREDIT CARD VARIANTS — SPARK, IGNITE, FLARE \& LUMINA — TO EXPAND ITS RETAIL BANKING \& FEE-INCOME FRANCHISE • CAPITAL ADEQUACY STOOD AT APPROXIMATELY 18.3%, PROVIDING A BUFFER FOR BUSINESS GROWTH \& POTENTIAL REGULATORY ADJUSTMENTS • KEY RISKS INCLUDE CASA WEAKNESS, DEPOSIT COMPETITION, MICROFINANCE BORROWER STRESS, ECL TRANSITION IMPACT, INSURANCE COMMISSION REGULATION \& HOUSING FINANCE TURNAROUND EXECUTION • OVERALL OUTLOOK REMAINS POSITIVE ON EARNINGS RECOVERY \& ASSET QUALITY STABILIZATION, WITH KEY MONITORABLES INCLUDING 14% FY27 LOAN GROWTH, DEPOSIT GROWTH ABOVE ADVANCES, 6.1–6.2% NIM STABILITY, 8–10% MICROFINANCE GROWTH \& FY27 EXIT ROA OF 1.2–1.4%

BANDHAN BANK LIMITED

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