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Revenue
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Revenue YoY
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reported change
EBITDA
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Where this quarter sits.
Quarter read
What the record says.
Bandhan Bank's Q2 FY26 results were below internal expectations, with PAT plunging 88% YoY to INR 112 crore due to margin compression and elevated credit costs. NIM fell to 5.8% (vs 6.4% QoQ) as the bank proactively passed on 75bps repo cut and recalculated MCLR, impacting yields. EEB stress persisted with gross slippages of INR 1,118 crore, though SMA 1/2 declined sequentially. Non-EEB advances grew 24% YoY, driving secured mix to 55%. Management expects NIM to trough in Q2 and improve from Q4 as deposit repricing benefits flow through. Credit cost guidance of 2.5-3% for EEB by FY27 exit remains. Key risk: political debt waiver rhetoric in Bihar could disrupt collections, though management sees no material impact yet.
Colored figures show movement against the previous available record.
Guidance to track
- Management expects EEB credit cost to settle at 2.5-3% by FY27 exit, with overall bank credit cost at 1.5-1.6%.
- NIM is expected to bottom at 5.8% in Q2 and improve from Q4 as term deposit repricing benefits flow through.
- EEB portfolio is expected to see gradual growth from Q3 onwards as operating environment shows signs of recovery.
- Secured loan mix is expected to increase further by 2-3 percentage points over the next 6-7 quarters.
Risks flagged
- Opposition manifestos in Bihar elections propose debt waivers for SHGs, which could disrupt collections if implemented.
- EEB slippages remained high at INR 1,118 crore, and management expects stress to continue for 1-2 more months.
- The 200bps MCLR cut and repo rate pass-through compressed NIM more than expected, with full benefit delayed to Q4.
- Net new EEB customer addition has stagnated due to industry-wide ineligibility, limiting growth potential.
Key quotes
- This quarter's performance reflects a transitional phase for the bank as we continue to realign our portfolio and operating model in response to the changing environment.
- We have taken steps to transition from a microfinance-focused bank to a full-service commercial bank.
- We expect the margin should improve from these levels. This could be sort of the bottom point, at least during the financial year.
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