Quarterly Financial Results
Bandhan Bank Reports 34.9% YoY Growth in Q1 FY27 Profit as Asset Quality Improves and Loan Book Expands
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- Bandhan Bank delivered a resilient Q1 FY27 performance with Gross Advances growing 16.4% YoY to ₹1.56 lakh crore, while Profit After Tax (PAT) increased 34.9% YoY to ₹5.0 billion.
- The bank continued improving its asset quality, expanded its secured lending mix, strengthened its retail deposit franchise, and maintained a robust capital position despite lower operating profit and margin pressure.Â
PRICE-SENSITIVE TRIGGER
Event: Bandhan Bank announced its Unaudited Financial Results for the quarter ended 30 June 2026 (Q1 FY27) along with its Earnings Update Presentation.
Type: Quarterly Financial Results
Impact: Positive
Immediate Effect: The quarter reflected continued execution of the bank’s diversification strategy through higher secured lending, stronger retail deposits, improved asset quality and healthy loan growth, supporting long-term balance sheet quality despite softer operating profitability.
Metrics:
Key Metrics:
- Net Revenue: ₹35.2 billion (+1.2% YoY | -1.2% QoQ)
- Net Interest Income (NII): ₹29.2 billion (+5.9% YoY | +4.5% QoQ)
- Operating Profit: ₹13.6 billion (-18.6% YoY | -5.8% QoQ)
- Profit After Tax (PAT): ₹5.0 billion (+34.9% YoY | -6.1% QoQ)
- Gross Advances: ₹1,555.6 billion (+16.4% YoY | +0.9% QoQ)
- Total Deposits: ₹1,648.9 billion (+6.6% YoY | -0.9% QoQ)
- Retail Deposits: ₹1,219.6 billion (+15.6% YoY)
- CASA Ratio:Â 29.4%
- Net Interest Margin (NIM):Â 6.2%
- Gross NPA Ratio:Â 3.1%
- Net NPA Ratio:Â 0.9%
- Credit Cost:Â 1.8%
- Capital Adequacy Ratio (CRAR):Â 18.2%
- CET-1 Ratio:Â 17.5%
Highlight:
- Asset quality remained a key positive, with Gross NPA declining to 3.1% and Net NPA improving to 0.9%, while PAT grew nearly 35% YoY despite moderation in operating profit.
What Happened ?
Bandhan Bank continued executing its transformation strategy during Q1 FY27 by expanding secured lending, diversifying its loan portfolio and strengthening liability quality. The bank’s secured portfolio increased to 56.8% of advances while non-Emerging Entrepreneurs Business (Non-EEB) loans accounted for 62.1% of the loan book, reflecting reduced dependence on microfinance lending.
On the liabilities side, retail deposits increased their share to 74% of total deposits, supporting a more granular and stable funding base. Simultaneously, continued improvement in recoveries and disciplined underwriting contributed to lower non-performing assets and reduced credit costs.Â
key details
Business Performance:
- Gross Advances increased 16.4% YoY to ₹1,555.6 billion.
- Non-EEB portfolio grew 27.4% YoY to ₹1,029.1 billion.
- Secured loan mix improved to 56.8%.
- Non-East portfolio represented 62.1% of total advances.
Note:
- The continued diversification across housing, retail and wholesale banking reflects management’s strategy to reduce concentration risk while building a balanced universal banking franchise.Â
Deposit Franchise:
- Total Deposits reached ₹1,648.9 billion.
- Retail Deposits increased to ₹1,219.6 billion.
- Retail deposits accounted for 74% of total deposits.
- CASA Ratio improved to 29.4%.
Note:
- Higher retail deposits enhance funding stability and reduce dependence on bulk deposits, supporting long-term margin resilience.Â
Asset Quality:
- Gross NPA improved to 3.1%.
- Net NPA reduced to 0.9%.
- Credit Cost declined to 1.8%.
- Provision Coverage Ratio (PCR) stood at 71.1%.
Note:
- Lower delinquency ratios and declining credit costs indicate continued progress in portfolio normalization and disciplined credit management.
Profitability:
During Q1 FY27, the company:
- NII increased 5.9% YoY to ₹29.2 billion.
- Net Revenue rose 1.2% YoY.
- Operating Profit declined 18.6% YoY.
- PAT increased 34.9% YoY.
- NIM stood at 6.2%.
- ROA was 1.0%.
- ROE stood at 7.7%.
While operating profitability remained under pressure, lower provisioning and improved credit quality supported strong year-on-year growth in net profit.Â
Strategic Developments:
During Q1 FY27, the bank:
- Expanded its network to 1,988 branches, 4,400 EEB Banking Units and 438 ATMs across 35 States and Union Territories.
- Served 31.8 million customers.
- Achieved 98% digital retail transactions.
- Opened 92% of savings accounts digitally.
- Recorded 18.2% CRAR with 17.5% CET-1.
- Completed 347,000 learning hours focused on employee upskilling.
Risk Analysis
Summary:
- Bandhan Bank continues improving portfolio quality and diversification; however, profitability remains influenced by operating efficiency, deposit mobilization, competitive lending markets and macroeconomic conditions.
Key Risks:
- Margin pressure may continue if funding costs remain elevated.
- Operating profit declined despite higher loan growth.
- Continued execution of diversification strategy remains essential.
- Credit performance must remain stable as the secured portfolio expands.
- Banking sector competition could pressure spreads and deposit growth.
Worst Case:
- If credit demand weakens or asset quality deteriorates alongside sustained pressure on operating margins, profitability and return ratios could remain below management expectations.
Risk Level: Medium
Company Commentary
- Management highlighted continued progress toward becoming a diversified universal bank with balanced exposure across Emerging Entrepreneurs Business, Housing, Retail and Wholesale Banking.
- The secured portfolio continues to increase, strengthening overall portfolio resilience.
- Retail deposits now contribute 74% of total deposits, supporting a stable funding profile.
- The bank remains focused on customer-centric digital banking, geographic diversification, disciplined underwriting and sustainable profitability.Â
Official Exchange Filing: Bandhan Bank Limited
