Bandhan Bank navigates transitional phase, eyes future growth despite Q2 pressures

Bandhan Bank reported gross advances of about INR 1.40 lakh crores for Q2 FY26, a 7% year-over-year (YoY) increase, while total deposits grew 11% YoY to INR 1.58 lakh crores. The Bank's net interest margin (NIM) for Q2 FY26 stood at 5.8%, down from 6.4% in Q1 FY26 due to the 75 basis point repo rate reduction and a 200 basis point reduction in MCLR. The EEB portfolio saw slippages of INR 1,118 crores during the quarter, contributing to a stable gross NPA ratio of 5% and a net NPA ratio of 1.4%.

Despite near-term pressures, the Bank's non-EEB book showed strong growth, with secured assets increasing to 55% of the total portfolio from 47% a year ago. CASA deposits, reflecting a 6.5% YoY decline, have shown signs of sequential recovery with a 5.6% increase. Bandhan Bank remains confident in achieving a 6% NIM target with anticipated growth in the EEB segment from Q3 onwards and further benefits from lower term deposit costs in Q4.

The Bank's capital adequacy ratio stands at 18.6%, with Tier I capital at 17.8%, providing a strong foundation for future strategic initiatives and growth. Technical write-offs amounted to INR 865 crores for the quarter. The Bank remains committed to its Bandhan 2.0 strategy, focusing on diversification, digital capabilities, and cost efficiencies to drive sustained performance.