Bandhan Bank demonstrated strong retail deposit momentum in Q3FY26, with retail deposits growing 17.20% year-on-year to ₹1,13,420 crore, now comprising 72.37% of total deposits. The private sector lender's strategic focus on retail franchise strengthening showed significant results, with retail term deposits recording exceptional growth of 35.80% to ₹70,690 crore, while maintaining robust liquidity coverage ratio at 149.14%.

Outstanding Retail Deposit Performance

The bank's retail deposit strategy delivered impressive results during the quarter, with substantial improvements across key retail segments and enhanced deposit composition.

Retail term deposits emerged as the standout performer with 35.80% year-on-year growth, reflecting successful customer acquisition and retention strategies in the retail banking segment.

Strategic Deposit Mix Transformation

Bandhan Bank's deposit composition reflects successful execution of its retail-focused strategy, with significant improvements in key deposit ratios strengthening its funding profile and reducing dependence on bulk deposits.

The retail deposit ratio improved significantly to 72.37% from 68.65% in the previous year, while bulk deposits' share in total term deposits decreased to 37.99% from 45.92%. However, the CASA ratio moderated to 27.26% from 31.73% year-on-year.

Robust Loan Growth and Collection Efficiency

The bank maintained steady lending momentum with loan growth returning to double digits, supported by enhanced collection efficiency across all business segments.

Pan-bank collection efficiency improved to 98.10% from 97.80% in the previous quarter, with the Emerging Entrepreneurs Business segment showing notable improvement to 98.00% from 97.50%.

Strong Liquidity and Financial Position

Bandhan Bank maintained exceptional liquidity management with a Liquidity Coverage Ratio of 149.14% as of December 31, 2025, significantly above the regulatory minimum requirement of 100.00%. This strong liquidity buffer provides adequate cushion for operational requirements and regulatory compliance, supporting the bank's continued growth trajectory in retail banking segments.

Bandhan Bank has completed a major portfolio cleanup by offloading bad loans worth ₹6,872.36 crore to asset reconstruction companies for a total consideration of ₹901.72 crore, according to an exchange filing on Monday. The strategic move involves disposing of non-performing assets (NPAs) and written-off loan portfolios from the bank's Emerging Entrepreneurs Business segment.

NPA Portfolio Sale to ARCIL

The bank sold its unsecured NPA portfolio with principal outstanding of ₹3,165.25 crore to Asset Reconstruction Company (India) Ltd. (ARCIL) for ₹569.75 crore. ARCIL emerged as the winning bidder under the Swiss Challenge Method, with the transaction structured on Security Receipts basis.

The security receipts subscription was divided between ARCIL taking 53.25% amounting to ₹303.39 crore, while Bandhan Bank retained 46.75% worth ₹266.36 crore.

Written-Off Loan Portfolio Transaction

In a separate transaction, Bandhan Bank offloaded its unsecured written-off loan portfolio valued at ₹3,707.11 crore to Phoenix ARC Pvt. for ₹331.97 crore. Phoenix ARC secured the deal as the highest bidder through an auction process.

Phoenix ARC subscribed to 37.84% of security receipts amounting to ₹125.60 crore, while Bandhan Bank retained 62.16% of SRs worth ₹206.37 crore.

Portfolio Composition and Business Impact

The disposed portfolios belonged to Bandhan Bank's Emerging Entrepreneurs Business segment and included:

• Group loans
• Small business loans
• Agricultural loans
• Aspiring business groups financing

Both portfolios consisted entirely of unsecured lending products, representing the bank's strategic focus on cleaning up its balance sheet by transferring problematic assets to specialized reconstruction companies.

Market Performance

Shares of Bandhan Bank closed 0.67% higher at ₹146.05 on the National Stock Exchange on Monday, outperforming the benchmark Nifty which declined 0.38%. However, the stock has fallen 8.18% on a year-to-date basis, reflecting broader market challenges.

Analyst sentiment remains mixed with 11 out of 28 analysts maintaining 'buy' ratings, 11 recommending 'hold', and six suggesting 'sell' according to Bloomberg data. The average 12-month price target implies a potential upside of 20.70% from current levels.