Bandhan Bank Reports 88% Drop in Q2 Net Profit Amid Portfolio Realignment
Bandhan Bank reported a significant 88% year-on-year decline in Q2 net profit to ₹112 crore, down from ₹937 crore. Net Interest Income fell 11.8% to ₹2,589 crore. Despite profit decline, the bank showed resilience in asset quality with stable GNPA at 5% and NNPA at 1.4%. Gross advances grew 7% YoY to ₹1.4 lakh crore, while deposits increased 11% YoY to ₹1.6 lakh crore. The bank is actively diversifying its portfolio with secured advances now constituting 55% of total advances, up from 47% a year ago. Non-EEB advances increased to 63% of the total loan book. The bank maintains a strong Capital Adequacy Ratio of 18.6%.
*this image is generated using AI for illustrative purposes only.
Bandhan Bank , one of India's fastest-growing private sector banks, reported a significant decline in its second-quarter net profit, as the bank continues to navigate through a transitional phase aimed at diversifying its portfolio.
Key Financial Highlights
The bank's financial performance for Q2 showed mixed results:
| Metric | Q2 FY26 | Q2 FY25 | YoY Change |
|---|---|---|---|
| Net Profit | ₹112.00 crore | ₹937.00 crore | -88.00% |
| Net Interest Income | ₹2,589.00 crore | ₹2,934.00 crore | -11.80% |
| Operating Profit | ₹1,310.00 crore | ₹1,855.00 crore | -29.40% |
| Provisions & Contingencies | ₹1,153.00 crore | ₹606.00 crore | 90.30% |
Asset Quality and Growth
Despite the profit decline, Bandhan Bank showed resilience in its asset quality and business growth:
- Gross Non-Performing Assets (GNPA) ratio remained stable at 5.00% quarter-on-quarter.
- Net Non-Performing Assets (NNPA) ratio held steady at 1.40%.
- Gross advances grew by 7.00% year-on-year to ₹1.4 lakh crore.
- Deposits increased by 11.00% year-on-year, reaching ₹1.6 lakh crore.
Portfolio Diversification
The bank is actively working on diversifying its loan portfolio:
- Secured advances grew by 25.00% year-on-year, now constituting nearly 55.00% of total advances, up from 47.00% a year ago.
- Non-EEB (Emerging Entrepreneurs Business) advances increased by 24.00% year-on-year, now representing 63.00% of the total loan book.
- The retail book (excluding housing) saw a significant growth of 66.00% year-on-year.
Management Commentary
Partha Pratim Sengupta, MD & CEO of Bandhan Bank, commented on the results: "Bandhan Bank's current quarter performance reflects a transitional phase for the bank as we continue to realign towards a more diverse and resilient portfolio. As we drive this transformation, we are looking to achieve a balanced profitable growth to drive sustainable long-term value creation for our stakeholders."
Capital Adequacy and Future Outlook
The bank maintains a strong capital position with a Capital Adequacy Ratio of 18.60%, well above the regulatory requirement of 11.50%. This robust capital base provides Bandhan Bank with a solid foundation to support its growth initiatives and navigate through the ongoing portfolio realignment.
As Bandhan Bank continues its transformation journey, it remains focused on innovation in technology, process refinement, and enhancing product and people capabilities. These strategic initiatives are expected to position the bank for the next phase of growth, dubbed "Bandhan Bank 2.0".
The bank's commitment to financial inclusion and serving the underserved segments of society remains intact, as it continues to expand its presence across India with nearly 6,350 banking outlets serving over 3.23 crore customers.
While the short-term financial results reflect the challenges of this transition, Bandhan Bank's strategic shift towards a more diversified and secured loan portfolio may potentially lead to more stable and sustainable growth in the long run.
Historical Stock Returns for Bandhan Bank
| 1 Day | 5 Days | 1 Month | 6 Months | 1 Year | 5 Years |
|---|---|---|---|---|---|
| -8.22% | -7.91% | -3.48% | -5.47% | -14.08% | -47.97% |
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