Bandhan Bank (BANDHANBNK) Q2 25/26 earnings summary

Executive summary

• Q2 FY2026 performance was below expectations due to margin pressure, elevated slippages in EEB, and slower advances growth, but structural improvements and diversification support confidence for H2 recovery.

• The bank is transitioning from a microfinance-focused model to a full-service commercial bank, emphasizing risk management, digital innovation, and customer-centricity.

• Expanded to 1,754 branches and 4,593 banking units across 35 states and UTs, serving 32.3 million customers; 98% of retail transactions are digital.

• Net profit for Q2 FY26 was ₹112 crore, down 70% YoY; H1 FY26 net profit was ₹484 crore, down 76% YoY.

• Focus on operational excellence, workforce upskilling, and digital transformation.

Financial highlights

• Gross advances reached ₹1.40 lakh crore, up 7% YoY and 5% sequentially; non-EEB portfolio grew 24% YoY, now 63% of advances.

• Total deposits rose to ₹1.58 lakh crore, up 11% YoY, with retail term deposits up 38% YoY; CASA ratio at 28%.

• Net Interest Income for Q2 FY26 was ₹2,589 crore, down 12% YoY; operating profit for Q2 was ₹1,310 crore, down 29% YoY; PAT for Q2 was ₹112 crore.

• NIM for Q2 FY2026 was 5.8% (6.1% for H1); cost/income ratio at 58.2%.

• Non-EEB book grew 23.8% YoY and 9.3% QoQ to ₹883.1 bn.

Outlook and guidance

• Expectation of margin improvement from Q4 as deposit repricing benefits flow through; credit cost guidance for EEB at 2.5%-3% by FY2027 exit, overall bank at 1.5%-1.6%.

• Emphasis on digital onboarding, customer centricity, and expanding retail deposit base.

• Management highlighted a transitional phase, focusing on portfolio diversification and sustainable growth.