Bandhan Bank , one of India's leading private sector banks, has reported a mixed financial performance in its latest quarter, showcasing strong growth in deposits but a slowdown in loan growth.

Deposit Growth

Bandhan Bank's total deposits showed robust growth, increasing by 16.1% year-over-year (YoY) to reach ₹1.55 lakh crore. This significant growth in deposits indicates strong customer trust and effective deposit mobilization strategies.

Loan Book Performance

The bank's loans and advances portfolio experienced a year-over-year growth of 6.4%. However, on a quarter-over-quarter (QoQ) basis, the loan book saw a decline of 2.5%. This mixed performance in the lending segment could be attributed to various factors, including market conditions and the bank's strategic decisions.

CASA Deposits and Liquidity

The bank reported a decrease in CASA (Current Account Savings Account) deposits, resulting in a reduced CASA ratio of 27.06%. Despite this, Bandhan Bank maintained a strong liquidity position with a liquidity coverage ratio of 178.28%.

Key Figures

The contrasting performance between loans and deposits presents an interesting scenario for Bandhan Bank. While the growth in deposits is a positive sign, indicating increased customer confidence, the quarter-over-quarter decline in loans and advances may require attention from the bank's management.

This mixed performance comes at a time when the banking sector is navigating through various economic challenges. Bandhan Bank's ability to grow its deposit base significantly could provide it with a stable funding source for future growth opportunities.

As the bank moves forward, stakeholders will likely be keen to see how Bandhan Bank leverages its growing deposit base to drive loan growth and overall business performance in the coming quarters, while also focusing on improving its CASA ratio and maintaining strong liquidity.

Bandhan Bank , a prominent player in the Indian banking sector, is setting its sights on significant profit growth and portfolio diversification, according to recent statements from its CEO, Partha Pratim Sengupta.

Projected Profit Growth

Sengupta expressed optimism about the bank's future performance, forecasting substantial quarterly profit growth starting from the third quarter of fiscal year 2026 (Q3 FY26). This positive outlook is primarily attributed to an expected reduction in microfinance slippages, which have been a concern for the bank in recent years.

Portfolio Diversification Strategy

In a strategic move to strengthen its financial position, Bandhan Bank is actively working on diversifying its loan portfolio. The bank has made significant strides in increasing its secured loans segment, which is projected to reach 50.50% of the total portfolio by FY25. This shift towards a more balanced portfolio mix is likely to enhance the bank's risk management and stability.

Navigating Potential Challenges

Despite the optimistic long-term outlook, Sengupta acknowledged potential short-term challenges:

• Anticipated pressure on Net Interest Income (NII) in the first two quarters of the upcoming fiscal year
• Expected rate cuts by the Reserve Bank of India (RBI)

However, the CEO remains confident that these pressures will be mitigated by the third quarter through strategic deposit cost rationalization measures.

Looking Ahead

Bandhan Bank's proactive approach to portfolio diversification and its focus on reducing microfinance slippages demonstrate a clear strategy for sustainable growth. As the bank continues to evolve its business model, investors and market watchers will be keen to observe how these strategies translate into actual performance in the coming quarters.

The bank's ability to successfully navigate the changing interest rate environment while simultaneously diversifying its portfolio will be crucial in achieving its projected profit growth from Q3 FY26 onwards.