Bandhan Bank stock: Q2 profit surges as bad loans ease

Bandhan Bank reported a sharp recovery in September-quarter earnings, with profit after tax rising more than fivefold year on year. The results, released on October 28, 2026, showed stronger operating income and lower provisions, while deposit composition and regulatory changes remain important risks for investors.

CNBC TV18 reported that profit after tax reached INR 620 crore in Q2 FY27, compared with about INR 110 crore a year earlier and INR 500 crore in the previous quarter. Net interest income increased to INR 2,960 crore, while pre-provision operating profit rose to INR 1,560 crore.

Asset Quality Improves, Deposits Need Attention

Gross non-performing assets fell to 3.1 percent from 5 percent a year earlier, while net non-performing assets declined to 0.9 percent from 1.4 percent. Provisions decreased 37.7 percent year on year, supporting the earnings recovery, although fresh slippages increased sequentially.

Gross advances expanded 13.1 percent year on year to INR 1.58 lakh crore, and deposits increased 9.2 percent to INR 1.72 lakh crore. The CASA ratio fell to 26.7 percent from 29.4 percent in the preceding quarter, highlighting the pressure on low-cost funding even as the loan book grows.

Guidance Keeps Recovery in Focus

Management maintained fiscal 2027 loan-growth guidance at 14 percent and expects emerging entrepreneurs business growth of 8 to 10 percent in the second half. It guided for a net interest margin of 6.1 to 6.2 percent and expects rate transmission to support improvement in the fourth quarter.

Management also targets a return on assets of 1.2 to 1.4 percent by the fourth quarter, with a medium-term target of 1.6 to 1.8 percent. A proposed change to insurance and third-party product distribution rules could reduce annual third-party income by about INR 200 crore if implemented in its current form.

Bandhan Bank's Business Model

Bandhan Bank is an India-based universal bank serving retail, emerging entrepreneurs, housing, wholesale and other lending customers. The bank grew from a financial-inclusion society founded in 2001, later became an NBFC and received its universal banking licence in 2015. Its investor information is available on the Bandhan Bank investor relations page.

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