Bandhan Bank Q2 FY26: Bandhan Bank experienced a sharp reduction in net profit for the quarter ending September 30, 2025. The bank reported net profits of ₹112 crore, marking an 88% year-on-year decrease from ₹937 crore in the same quarter last year. This steep decline has been chiefly influenced by elevated provisioning costs and challenging asset quality conditions.
Fall in Net Interest Income and Operating Profits
The bank’s net interest income (NII) dropped 11.8% year-on-year to ₹2,589 crore compared to ₹2,934 crore in the previous fiscal year’s quarter. Additionally, operating profit suffered a 29.4% decline, registering ₹1,310 crore. The downturn highlights margin pressures and increased expenditure on risk provisions, which rose by over 90% year-on-year, reaching ₹1,153 crore.
Asset Quality Concerns
Bandhan Bank’s asset quality showed signs of strain during the quarter. The gross non-performing assets (NPA) surged nearly 15% to ₹7,015 crore, pushing the gross NPA ratio from 4.96% to 5.02%. Concurrently, net NPA rose about 14% year-on-year to ₹1,843 crore, with the net NPA ratio expanding to 1.37%.
Growth in Advances and Deposits
Despite profitability pressures, Bandhan Bank’s loan book expanded by 7.2% year-on-year to ₹1.40 lakh crore. The total deposits rose 10.9% year-on-year, reaching ₹15.81 lakh crore. The growth in retail term deposits was particularly strong at 39%, offsetting declines in CASA deposits. This shift toward stable, granular deposits reflects strategic recalibration.
Loan Portfolio Diversification and Capital Adequacy
The bank’s loan book composition now shows wholesale loans comprising 29.2%, with housing and EEB segments each accounting for 23.6%. The liquidity coverage ratio improved to approximately 152.68%, indicating solid liquidity management and a move toward a resilient funding mix.
Market Performance and Analyst Sentiment
Following the earnings announcement, Bandhan Bank’s shares declined 1.68% to close at ₹170.58 on the NSE. Analysts remain cautiously optimistic with 16 of 28 recommending buy. The consensus 12-month price target stands at about ₹193, indicating an upside potential near 13.3%.
Outlook
Bandhan Bank is undergoing a phase of portfolio realignment and asset quality management. Although it faces near-term earnings pressures, growth in deposits and advances signals recovery momentum. Investors will watch the bank’s ability to improve profitability and asset quality in the upcoming quarters closely.
Disclaimer: This analysis is based on publicly available information and should not be considered as financial advice. Investors should consult their financial advisors before making investment decisions.