Bandhan Bank Reports Q2FY26 Net Profit of Rs 112 Crore Amid Margin Pressure

Bandhan Bank , a leading private sector lender, reported its financial results for the second quarter of fiscal year 2026 (Q2FY26), showcasing resilience amid challenging market conditions. The bank's performance reflects ongoing efforts to diversify its portfolio and adapt to changing market dynamics.

Key Financial Highlights

Metric	Q2FY26	Q2FY25	YoY Change
Net Profit	112.00	937.00	-88.00%
Net Interest Income (NII)	2,589.00	2,942.00	-12.00%
Net Interest Margin (NIM)	5.80%	7.30%	-150 bps
Gross Advances	1,40,000.00	1,31,000.00	7.00%
Deposits	1,58,000.00	1,43,000.00	11.00%
Gross NPA Ratio	5.00%	7.20%	-220 bps
Net NPA Ratio	1.40%	1.90%	-50 bps

Performance Analysis

Bandhan Bank's Q2FY26 results reflect the impact of recent market changes and the bank's strategic initiatives:

Profitability: The bank reported a net profit of Rs 112 crore, down from Rs 937 crore in Q2FY25. This decline was primarily attributed to margin pressure and elevated credit costs.
Net Interest Margin: NIM compressed to 5.8% from 6.4% in the previous quarter, mainly due to the impact of a 75 basis point repo rate cut and a 200 basis point MCLR reduction.
Loan Book Growth: Gross advances stood at Rs 1.40 lakh crore, showing a 7% year-on-year growth. The non-EEB (Emerging Entrepreneur Business) portfolio grew by 24% YoY, now accounting for 63% of total advances.
Deposit Growth: Total deposits increased by 11% YoY to Rs 1.58 lakh crore, outpacing the growth in advances. Retail deposits, including CASA and retail term deposits, grew by 16% YoY.
Asset Quality: Gross and net NPA ratios remained stable at 5% and 1.4% respectively. The bank undertook technical write-offs of Rs 865 crore during the quarter.
Capital Adequacy: The Capital Adequacy Ratio stands at 18.6%, with Tier I capital at 17.8%, providing adequate headroom for future growth.

Strategic Initiatives and Outlook

Bandhan Bank continues to focus on diversifying its loan portfolio and strengthening its liability franchise:

Portfolio Diversification: The secured loan book grew 25% YoY, now accounting for 55% of total advances, up from 47% a year ago.
Digital Initiatives: The bank has integrated with various government payment systems, enhancing its role in facilitating digital transactions.
Collection Efficiency: Overall collection efficiency, excluding NPAs, improved marginally to 98.0% in Q2FY26 from 97.9% in Q1FY26.
Future Outlook: Management expects margin improvement from Q4 onwards as term deposit repricing benefits flow through. The bank remains focused on prudent risk management and identifying new growth avenues.

Partha Pratim Sengupta, Managing Director and CEO of Bandhan Bank, commented on the results: "This quarter's performance reflects a transitional phase for the Bank as we continue to realign our portfolio and operating model in response to the changing environment. We remain confident in the Bank's underlying strength and the initiatives we have undertaken to drive sustainable growth."

As Bandhan Bank navigates through this transitional period, it continues to focus on enhancing operational efficiency, strengthening its digital capabilities, and maintaining a robust capital position to support future growth initiatives.

1 Day	5 Days	1 Month	6 Months	1 Year	5 Years
-0.45%	-2.35%	-6.43%	-13.55%	-17.93%	-62.86%

Bandhan Bank 's share price gained 1.43% following the release of its second quarter results, despite reporting a significant decline in profits. The bank's financial performance for Q2 showed mixed signals, with some areas of concern and others showing resilience.

Profit and Asset Quality

Bandhan Bank reported a substantial 88% decline in standalone net profit for the second quarter:

Metric	Q2 Current Year	Q2 Previous Year	Change
Net Profit	₹112.00 crore	₹937.00 crore	-88.00%

The bank's asset quality showed some deterioration:

Metric	Current Quarter	Previous Quarter
Gross NPA Ratio	5.02%	4.96%
Gross NPA (Absolute)	₹7,015.13 crore	₹6,622.64 crore
Net NPA Ratio	1.37%	1.36%

Deposit Growth and Loan Book Composition

On a positive note, Bandhan Bank demonstrated strong deposit growth:

Metric	Amount	YoY Growth
Total Deposits	₹15.81 lakh crore	10.90%
Retail Deposits	₹1.12 lakh crore	16.00%

The bank's loan book composition is as follows:

Segment	Percentage of Total Loan Book
Wholesale Banking	29.20%
Housing	23.60%
EEB Group	23.60%

Stock Performance

Despite the positive movement following the Q2 results announcement, Bandhan Bank's stock has faced challenges over the past year:

Timeframe	Stock Performance
Past 12 months	-13.58%

Financial Trends

Analyzing the quarterly financial data reveals some concerning trends:

Metric	Q2 (Current)	Q1	QoQ Change
Revenue	₹5,900.30 crore	₹6,201.50 crore	-4.86%
Net Profit	₹111.90 crore	₹372.00 crore	-69.92%
EBITDA	₹157.80 crore	₹521.50 crore	-69.74%
EPS	₹0.69	₹2.31	-70.13%

The significant drop in profitability metrics indicates that Bandhan Bank is facing challenges in maintaining its financial performance. However, the growth in deposits suggests that the bank still maintains customer trust and continues to expand its deposit base.

Investors and analysts will be closely watching how Bandhan Bank addresses its asset quality concerns and works to improve its profitability in the coming quarters. The bank's ability to leverage its strong deposit growth and manage its loan book effectively will be crucial for its future performance.