Bandhan Bank FY26 Annual Earnings Summary
4 quarters covered · ₹0 Cr revenue · ₹1,224 Cr PAT · 0.0% average EBITDA margin.
Quarter-by-quarter progression
Management promises made during the year
Promise tracking available after 2+ quarters of coverage.
Risks flagged during the year
EEB slippages remained high at INR 1,118 crore, and management expects stress to continue for 1-2 more months.
Q2 FY26 · highThe 200bps MCLR cut and repo rate pass-through compressed NIM more than expected, with full benefit delayed to Q4.
Q3 FY26 · high42% of the microfinance portfolio is in West Bengal, where SMA1 rose sharply due to holiday-related collection gaps; state elections could disrupt collections.
Q1 FY26 · mediumProcedural change in raising demand on holidays increased SMA-0 pool; management says recoverable but may persist in Q2 due to festivals.
Q1 FY26 · mediumGrowing secured loan share (lower yield) and repo rate cuts pressure NIM; management expects stabilization only in H2.
Q1 FY26 · mediumAnalyst noted 4%+ NPA in recent vintages; management attributed to industry stress and expects improvement as new guardrails stabilize.
Q2 FY26 · mediumOpposition manifestos in Bihar elections propose debt waivers for SHGs, which could disrupt collections if implemented.
Q2 FY26 · mediumNet new EEB customer addition has stagnated due to industry-wide ineligibility, limiting growth potential.
Q3 FY26 · mediumCASA declined 4% YoY to INR 42,730 crore due to savings rate cuts; recovery to 31% ratio may take longer than expected.
Q3 FY26 · mediumNPAs in the housing portfolio have been rising; management cited legacy underwriting issues and is implementing process changes, but impact may take time.
Q4 FY26 · mediumManagement flagged potential adverse effects from ongoing war on fuel prices, inflation, and rural demand, which could impact asset quality and credit costs.
Q4 FY26 · mediumTransition impact of ECL norms estimated at INR 1,250 crore (based on Dec'25 portfolio), with annual CRAR impact of 16-17bps over 5 years. Flow impact still being assessed.
What changed through the year
Q1 FY26 · Credit cost guidance of 2.5% for FY26
Management reiterated target of 2.5% credit cost for full year, with sequential improvement expected each quarter.
Q1 FY26 · EV portfolio growth of 5-8% in FY26
EV book expected to grow 5-8% for the full year, with H2 recovery compensating for H1 decline.
Q1 FY26 · Overall advances growth of ~10% in FY26
Total advances growth target of around 10% for FY26, driven by non-EV segments growing at 26-27%.
Q1 FY26 · NIM stabilization in H2 FY26
Management expects NIM compression in Q2 but stabilization in H2 due to lower slippages and deposit repricing benefits.
Q2 FY26 · Credit cost target of 2.5-3% for EEB by FY27 exit
Management expects EEB credit cost to settle at 2.5-3% by FY27 exit, with overall bank credit cost at 1.5-1.6%.
Q2 FY26 · NIM improvement from Q4 onwards
NIM is expected to bottom at 5.8% in Q2 and improve from Q4 as term deposit repricing benefits flow through.
Q2 FY26 · EEB growth to resume from Q3
EEB portfolio is expected to see gradual growth from Q3 onwards as operating environment shows signs of recovery.
Q2 FY26 · Secured mix to increase to 57-58% over 7 quarters
Secured loan mix is expected to increase further by 2-3 percentage points over the next 6-7 quarters.
Q3 FY26 · Credit cost target of 1.6-1.7% by Q4 FY27
Management reiterated medium-term credit cost guidance of 1.6-1.7% overall and 2.5-3% for the EB segment by end of FY27.
Q3 FY26 · Advances CAGR of 15-17% over 2-3 years
Management guided for 15-17% CAGR in advances, with deposit growth expected to be higher than loan growth.
Q3 FY26 · NIM improvement from current levels
CFO expects NIM to improve from 5.9% due to cost of funds declining 35-50 bps over next 2-3 quarters, partly offset by repo rate cut impact of ~11 bps.
Q3 FY26 · EB book to show sequential growth
Management expects the microfinance portfolio to grow sequentially, with degrowth phase behind, supported by improving disbursements and collections.
Q4 FY26 · ROA target of 1.6-1.8% by Q4 FY27
Management reiterated guidance to achieve ROA of 1.6-1.8% (give or take 10bps) by exit of FY27, driven by margin improvement, lower credit costs, and higher fee income.
Q4 FY26 · NIM improvement of 10-20bps over next 2-3 quarters
Expect further NIM expansion of 10-20bps from current 6.2% level, driven by continued reduction in cost of funds as term deposits reprice.
Q4 FY26 · Credit cost guidance of 1.6-1.7% by exit FY27
Credit cost expected to improve from current 2% to 1.6-1.7% by Q4 FY27, aided by sustained collection efficiency and lower slippages.
Q4 FY26 · PSLC cost reduction by 50% in FY27
Priority sector lending certificate cost expected to halve in FY27 compared to FY26, with near-neutralization by FY28, driven by process improvements in EEB and direct agri loans.