Bandhan Bank Limited Q2 FY2026 Results
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Overview
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Detailed Analysis
Sentiment
Mixed
Executive Summary
Bandhan Bank Q2 FY26: Revenue ₹3,135 Cr (-11.5% YoY), PAT ₹112 Cr (-88.1% YoY)
Quarter context: Q2 FY26 results show business growth in balance-sheet metrics but pressure on profitability. Revenue: Net total income for Q2 FY26 was ₹3,135 Cr, down 11.5% YoY. Profitability: Profit after tax for Q2 FY26 was ₹112 Cr, down 88.1% YoY, driven by sharply higher provisions. Key development: Management cited a transitional realignment of the portfolio and elevated provisions of ₹1,153 Cr in Q2 FY26; capital remains comfortable at 18.6% including profits.Advances (Gross)
₹1,40,041 Cr+7% YoY, +5% QoQ
Deposits
₹1,58,075 Cr+11% YoY, +2% QoQ
Net Interest Income (NII)
₹2,589 Cr-11.5% YoY, -6% QoQ
Net Total Income
₹3,135 Cr-11.5% YoY, -10% QoQ
Operating Profit
₹1,310 Cr-29.4% YoY, -21% QoQ
Provisions & Contingencies
₹1,153 Cr+90.3% YoY
Gross NPA Ratio
5.0%+0.3 pp YoY, flat QoQ
Capital Adequacy Ratio (incl. profits)
18.6%Key Highlights
9
Secured advances rose 25% YoY and now constitute nearly 55% of total advances in Q2 FY26 versus 47% a year ago, indicating active collateralisation of lending mix.
Retail (ex-housing) book expanded 66% YoY in Q2 FY26 while Wholesale Banking grew 27% YoY and Housing grew 12% YoY, showing concentrated growth in retail segments.
Provision Coverage Ratio was 73.7% as of Sept 30, 2025, reflecting the bank's buffer against credit losses.
CASA deposits stood at ₹44,211 Cr and CASA ratio was 28% as of Sept 30, 2025, supporting low-cost funding mix for the bank.
Collection efficiency for EEB loans was 98% in Q2 FY26, and SMA-1/SMA-2 for EEB showed sequential improvement, signalling recovery in the EEB portfolio.
Non-EEB advances grew 24% YoY and accounted for 63% of advances in Q2 FY26 versus 55% in Q2 FY25, indicating a strategic shift away from EEB concentration.
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Key Highlights
9
Secured advances rose 25% YoY and now constitute nearly 55% of total advances in Q2 FY26 versus 47% a year ago, indicating active collateralisation of lending mix.
Retail (ex-housing) book expanded 66% YoY in Q2 FY26 while Wholesale Banking grew 27% YoY and Housing grew 12% YoY, showing concentrated growth in retail segments.
Provision Coverage Ratio was 73.7% as of Sept 30, 2025, reflecting the bank's buffer against credit losses.
Operating cash flows for H1 FY26 were negative at ₹(1,588.77) Cr (net cash used in operating activities), which could pressure near-term liquidity if trends persist.
CASA deposits stood at ₹44,211 Cr and CASA ratio was 28% as of Sept 30, 2025, supporting low-cost funding mix for the bank.
Collection efficiency for EEB loans was 98% in Q2 FY26, and SMA-1/SMA-2 for EEB showed sequential improvement, signalling recovery in the EEB portfolio.
Non-EEB advances grew 24% YoY and accounted for 63% of advances in Q2 FY26 versus 55% in Q2 FY25, indicating a strategic shift away from EEB concentration.
Net Interest Margin (H1 FY26) reported at 6.1% on a half-year basis, providing a reference for interest income performance amid NII compression in Q2 FY26.
The bank added 9 lakh customers in the quarter to reach over 3.23 crore customers and operates nearly 6,350 outlets, underlining continued distribution expansion.
Guidance & Outlook
5
Management states the bank is in a 'transitional phase' to realign towards a more diversified and resilient portfolio while targeting balanced profitable growth going forward.
Capital position at 18.6% including profits (Sept 30, 2025) provides capacity to pursue growth or absorb incremental provisions in the near term.
Bank highlights focus on technology, process refinement and product/people capability building as strategic priorities to drive the next phase of growth.
The bank signalled emphasis on expanding secured and non-EEB lending (secured share ~55% and non-EEB share 63% in Q2 FY26), which may moderate credit volatility going forward.
No specific guidance on cost or provision trajectory was provided in the release beyond the strategic aim to achieve sustainable profitability under ‘Bandhan Bank 2.0’.
Risks & Concerns
6
Sharp increase in provisions to ₹1,153 Cr in Q2 FY26 (up 90.3% YoY) materially depressed PAT and creates uncertainty on near-term earnings volatility.
Net profit for Q2 FY26 fell to ₹112 Cr, an 88.1% YoY decline, indicating earnings sensitivity to provisioning and NII compression.
Gross NPA ratio rose to 5.0% in Q2 FY26 from 4.7% in Q2 FY25, signalling deterioration in asset quality year-on-year.
Net interest income declined to ₹2,589 Cr in Q2 FY26 (-11.5% YoY), exposing margin risk if funding costs or asset yields do not stabilise.
Operating cash flow used ₹1,588.77 Cr in H1 FY26, which could pressure liquidity metrics if the bank does not reverse the working-capital or investment outflows.
EEB loan book contracted 13% YoY and remains a source of portfolio transition risk while the bank rebalances to non-EEB exposures.
AI-generated analysis. May contain inaccuracies — verify against original sources.