Bandhan Bank Q1 results: Net profit declines 65% to Rs 372 crore

Bandhan Bank

Bandhan Bank reported a net profit of Rs 372 crore for Q1 FY26 marking a 65 percent decline from Rs 1,063 crore in Q1 FY25.

The bank’s total income for the quarter stood at Rs 6,201.49 crore, up marginally from Rs 6,081.73 crore in Q1 FY25.

According to the lender, the weakening asset quality led to elevated provisions and higher credit costs, which significantly impacted the bottom line. Additionally, a year-on-year decline in net interest income (NII), which is the difference between interest earned and interest expended, further weighed on profitability.

In its investor communication, the bank emphasised that elevated slippages, especially in the eastern region, and lingering stress in the micro-finance portfolio were key contributors to the asset quality pressures.

This, in turn, necessitated higher provisioning during the quarter, impacting net earnings. Management acknowledged that the bank remains in a phase of consolidation and is taking calibrated steps to strengthen underwriting standards and improve collections.

NII declined 8 percent from Rs 2,987 crore in the year-ago quarter. The Net Interest Margin (NIM) for the quarter was 6.4 percent.

Operating profit stood at Rs 1,668 crore, lower than Rs 1,941 crore in Q1 FY25.

The bank continued to face high provisioning costs, with Rs 1,147 crore allocated for provisions and contingencies in Q1 FY26, sharply higher than Rs 523 crore in Q1 FY25.

On the asset quality front, the bank’s gross non-performing asset (NPA) ratio rose to 5.0 percent in Q1 FY26 from 4.2 percent in the same quarter last year.

The net NPA stood at 1.4 percent, higher than 1.1 percent in FY25.

Bandhan Bank’s capital adequacy ratio stood at 19.4 percent as of June 30, 2025, above the regulatory requirement of 11.5 percent.

The bank’s total assets stood at Rs 1,89,403 crore, and the company’s return on assets (RoA) for the quarter was 0.20 percent.

On the business side, Bandhan Bank’s deposits grew 16 percent year-on-year to Rs 1.55 lakh crore. The share of retail deposits (CASA + retail term deposits) stood at 68 percent. CASA deposits were Rs 41,858 crore, with a CASA ratio of 27.1 percent. Retail term deposits witnessed a 34 percent year-on-year growth to Rs 63,661 crore.

Gross advances reached Rs 1.34 lakh crore, registering a 6 percent growth over the previous year.

The bank also saw a significant shift in the composition of its loan book. The share of secured loans increased from 43 percent a year ago to over 52 percent in Q1 FY26.

Commenting on the performance, Partha Pratim Sengupta, Managing Director and CEO of Bandhan Bank, said, “While the operating environment poses certain challenges, our performance reflects the underlying resilience of our business and the strength of our strategic direction. We remain focused on prudent risk management, operational efficiency, and delivering long-term value for our customers and stakeholders.”

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