Bandhan Bank Shares Rise 1.43% Despite 88% Profit Decline in Q2

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.

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 , 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.