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Geopolitical risk from war impact
View Risks →Bandhan Bank Limited — Q4 FY26
Bandhan Bank reported a strong Q4 FY26 with PAT of INR 534 crore, up 68% YoY, driven by margin expansion (NIM at 6.2%, up 30bps QoQ) and lower credit costs (2% vs 3.3% in Q3).
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Bandhan Bank reported a strong Q4 FY26 with PAT of INR 534 crore, up 68% YoY, driven by margin expansion (NIM at 6.2%, up 30bps QoQ) and lower credit costs (2% vs 3.3% in Q3). Advances grew 13% YoY to INR 1.54 lakh crore, with secured book now 56% of portfolio. Asset quality improved: gross slippages fell to INR 1,028 crore (from INR 1,314 crore in Q3), and collection efficiency ex-NPA reached 98.9%. Management guided for ROA of 1.6-1.8% by Q4 FY27, supported by further NIM improvement of 10-20bps, lower credit costs, and higher fee income. Key risk: potential macroeconomic headwinds from geopolitical tensions (war) impacting fuel prices and rural demand.
बंधन बैंक ने वित्त वर्ष 2026 की चौथी तिमाही में शानदार प्रदर्शन किया। इसका शुद्ध लाभ 534 करोड़ रुपये रहा, जो पिछले साल की समान तिमाही से 68% अधिक है। यह वृद्धि ब्याज आय में सुधार (NIM 6.2% पर पहुंचा) और कर्ज वसूली की लागत कम होने (2% बनाम पिछली तिमाही में 3.3%) से हुई। बैंक ने कुल 1.54 लाख करोड़ रुपये का कर्ज दिया, जो 13% बढ़ा। अब 56% कर्ज सुरक्षित (गारंटी वाला) है। कर्ज वसूली बेहतर हुई और बैड लोन घटे। बैंक का लक्ष्य अगले साल तक मुनाफा 1.6-1.8% तक पहुंचाना है। लेकिन युद्ध जैसी भू-राजनीतिक समस्याओं से ईंधन की कीमतें और ग्रामीण मांग प्रभावित हो सकती है।
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Gross Slippages
INR 1,028 crore
-22% QoQ
Gross slippages declined sharply from INR 1,314 crore in Q3, driven by improvement in the EEB segment.
Collection Efficiency (ex-NPA)
98.9%
+80bps QoQ
Overall collection efficiency improved from 98.1% in Q3, with EEB segment at 99.3% for the quarter.
CASA Ratio
29.3%
+200bps QoQ
CASA ratio improved sharply from 27.3% in Q3, driven by strong current account growth.
EEB Portfolio Growth (QoQ)
8%
+8% QoQ
EEB portfolio posted strong sequential growth of 8%, reversing earlier contraction and signaling stabilization.
What Changed vs Last Quarter
NEW
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.
NEW
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.
NEW
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.
UPDATED
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.
DROPPED
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.
DROPPED
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.
DROPPED
EB book to show sequential growth
Management expects the microfinance portfolio to grow sequentially, with degrowth phase behind, supported by improving disbursements and collections.
NEW RISK
Geopolitical risk from war impact
Management flagged potential adverse effects from ongoing war on fuel prices, inflation, and rural demand, which could impact asset quality and credit costs.
NEW RISK
ECL provisioning impact on capital
Transition 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.
NEW RISK
Intense deposit competition
Management noted rising deposit rates offered by competitors, which could pressure cost of funds and margin expansion if the bank needs to offer higher rates to retain deposits.
RISK GONE
West Bengal concentration in EB book
42% of the microfinance portfolio is in West Bengal, where SMA1 rose sharply due to holiday-related collection gaps; state elections could disrupt collections.
RISK GONE
CASA deposit erosion
CASA declined 4% YoY to INR 42,730 crore due to savings rate cuts; recovery to 31% ratio may take longer than expected.
RISK GONE
Housing loan asset quality deterioration
NPAs in the housing portfolio have been rising; management cited legacy underwriting issues and is implementing process changes, but impact may take time.
RISK GONE
Additional labor code provisions
INR 120 crore gratuity provision booked this quarter; further provisions may be needed as state-level rules are notified, but quantum is uncertain.
🤫 Topics management stopped discussing
Mentioned in Q1 FY26, Q2 FY25, Q3 FY25, Q4 FY25
Growing secured loan share (lower yield) and repo rate cuts pressure NIM; management expects stabilization only in H2.
Mentioned in Q2 FY25, Q3 FY25, Q4 FY25
Credit costs remain high at 3.9% due to continued stress in microfinance; management expects H1 FY26 to be challenging.
Mentioned in Q3 FY26, Q4 FY25
Management guided for 15-17% CAGR in advances, with deposit growth expected to be higher than loan growth.
Mentioned in Q1 FY25, Q2 FY25
Overall advances growth target of 18% ± 1%, with EEB growing at 10%-12% and secured book growing faster.
Mentioned in Q1 FY25, Q2 FY25
Tier 1 ratio (including H1 profits) at ~14% is adequate for now, but rapid secured book growth and elevated credit costs could necessitate capital raise if stress persists.
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Guidance and risk preview
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, a...
Management flagged potential adverse effects from ongoing war on fuel prices, inflation, and rural demand, which could impact asset quality and cre...
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