Bandhan Bank Q1 profit rises 35% on lower provisions; asset quality improves
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Bandhan Bank on Tuesday reported a 34.8% year-on-year rise in net profit for the quarter ended June 2026, aided by lower provisions and an improvement in asset quality, even as growth in core interest income remained modest.
The private sector lender posted a net profit of ₹501.7 crore for the June quarter, compared with ₹372 crore in the corresponding period last year. Net interest income (NII), the difference between interest earned and interest expended, rose 5.9% to ₹2,921 crore from ₹2,757 crore a year ago.
Asset quality strengthens
The bank continued to improve its asset quality during the quarter, with both gross and net non-performing asset (NPA) ratios declining sequentially.
Gross NPAs fell to ₹4,881 crore at the end of June from ₹5,020 crore in the March quarter, while net NPAs declined to ₹1,412 crore from ₹1,452 crore.
Consequently, the gross NPA ratio improved to 3.15% from 3.27% three months earlier, while the net NPA ratio eased to 0.93% from 0.97%. Credit cost also moderated to 1.8%, compared with 3.5% in the year-ago period, reflecting improving recoveries and lower stress in the loan book.
Provisions stood at ₹682.6 crore, broadly unchanged from ₹677 crore in the preceding quarter but sharply lower than ₹1,147 crore a year ago, supporting the growth in bottom-line earnings.
Loan book grows, secured portfolio expands
Bandhan Bank's gross advances increased 16.4% year-on-year to ₹1.56 lakh crore, while the non-East business book grew 27.4%, reflecting the lender's continued diversification strategy.
The bank also continued to increase the share of secured loans in its portfolio, with the secured mix rising to 56.8%, compared with 52.1% a year ago. Retail deposits grew 15.6% year-on-year, while the CASA ratio improved to 29.4% from 27.1% in the year-ago period.
Margins remain under pressure
Despite the improvement in asset quality, profitability at the operating level remained under pressure.
Operating profit declined 18.6% year-on-year to ₹1,358 crore, while total net revenue rose only 1.2%. Net interest margin (NIM) stood at 6.2%, down 16 basis points from a year ago, although it improved marginally on a sequential basis. Return on assets stood at 1%, while return on equity was 7.7%.
Commenting on the quarter, the bank said it remained focused on strengthening its balance sheet through portfolio diversification, increasing the share of secured assets, improving asset quality and expanding its retail deposit franchise. It also highlighted continued growth in its non-East portfolio and digital banking initiatives as part of its long-term strategy.