BANDHANBNKNSEQ2FY26November 06, 2025

Bandhan Bank Limited

11,453words
102turns
11analyst exchanges
5executives
Management on call
Partha Pratim Sengupta
MANAGING DIRECTOR AND CHIEF EXECUTIVE OFFICER, BANDHAN BANK LIMITED
Ratan Kumar Kesh
EXECUTIVE DIRECTOR AND CHIEF OPERATING OFFICER, BANDHAN BANK LIMITED
Rajinder Kumar Babbar
EXECUTIVE DIRECTOR AND CHIEF BUSINESS OFFICER, BANDHAN BANK LIMITED
Rajeev Mantri
CHIEF FINANCIAL OFFICER, BANDHAN BANK LIMITED
Vikash Mundhra
HEAD (INVESTOR
Key numbers — 40 extracted
75 basis point
to realign our portfolio and operating model in response to the changing environment. The recent 75 basis point repo cut in Q1, which we proactively passed on to our customers from the first day of Q2, had a s
rs,
ustainable growth ahead. As the repricing of deposits takes place over the next few quarters, we expect to see the full benefit of lower funding costs, which will help improve margins and supp
75 basis point
e are a few factors that contributed to the softer Q2 FY’26 performance outcome: · Firstly, the 75 basis points repo cut impacted around 45% of our advances and the 200 basis points reduction in MCLR affected
45%
the softer Q2 FY’26 performance outcome: · Firstly, the 75 basis points repo cut impacted around 45% of our advances and the 200 basis points reduction in MCLR affected another 5% of our loan book,
200 basis point
ance outcome: · Firstly, the 75 basis points repo cut impacted around 45% of our advances and the 200 basis points reduction in MCLR affected another 5% of our loan book, which moderated the interest income grow
5%
t impacted around 45% of our advances and the 200 basis points reduction in MCLR affected another 5% of our loan book, which moderated the interest income growth during the quarter. We have partly o
Rs. 1.40 lakh crore
icators from the 2nd Quarter of FY26. As of September 30, 2025, our gross advances stood at about Rs. 1.40 lakh crores, reflecting a YoY growth of 7%. On the liabilities side, total deposits reached Rs. 1.58 lakh cr
7%
mber 30, 2025, our gross advances stood at about Rs. 1.40 lakh crores, reflecting a YoY growth of 7%. On the liabilities side, total deposits reached Rs. 1.58 lakh crores, growing by a healthy 11% Y
Rs. 1.58 lakh crore
1.40 lakh crores, reflecting a YoY growth of 7%. On the liabilities side, total deposits reached Rs. 1.58 lakh crores, growing by a healthy 11% YoY and, importantly, outpacing the growth in advances. This clearly r
11%
of 7%. On the liabilities side, total deposits reached Rs. 1.58 lakh crores, growing by a healthy 11% YoY and, importantly, outpacing the growth in advances. This clearly reflects our strategic empha
38%
upports sustainable growth. Our retail term deposits continue to show strong momentum, growing by 38% YoY. This growth reflects the increasing trust and engagement of our individual customers and the
28%
al customers and the effectiveness of our distribution network. Our CASA deposits now account for 28% of the total deposit base and the overall share of retail deposits, including CASA and retail ter
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Guidance — 20 items
Vikash Mundhra
opening
“After the Management’s remarks, we will be happy to take your questions and provide any additional clarity on the Quarter’s Performance and our Outlook.”
Vikash Mundhra
opening
“As the repricing of deposits takes place over the next few quarters, we expect to see the full benefit of lower funding costs, which will help improve margins and support profitability.”
Vikash Mundhra
opening
“We expect these measures to translate into improved growth and profitability in the upcoming quarter.”
Vikash Mundhra
opening
“Rajeev Mantri, will provide a comprehensive overview of the financials, I would like to take this opportunity to highlight a few key developments and performance indicators from the 2nd Quarter of FY26.”
Vikash Mundhra
opening
“However, during a transition we may witness short term pain but I see green shoots and I am confident that in the long run we will achieve balanced profitable growth with a focus on enhancing shareholder value.”
Rajeev Mantri
opening
“We expect to see further benefits from lower term deposit costs flowing through from the fourth quarter onwards, which should help support margin improvement going forward.”
Mahrukh Adajania
qa
“Where do you expect the full year and the next year credit costs to settle?”
Mahrukh Adajania
qa
“So, how much of that would you expect to rub off to MFI in case these things come through in Bihar?”
Mahrukh Adajania
qa
“Partha Pratim Sengupta: So, first of all, to answer your query on credit costs, so we have a guidance for the next two, three years, where we have said that we should come to around 2.5%.”
Mahrukh Adajania
qa
“So, we expect that substantial slippages can be arrested.”
Risks & concerns — 15 flagged
The initiatives we have undertaken, including enhanced collection, strengthened risk management and disciplined growth strategies are already in motion.
— Vikash Mundhra
Our NIM for Q2FY26 stood at 5.8%, reflecting some pressures, mainly due to the impact of the repo rate moderation.
— Vikash Mundhra
Our focus will firmly remain on prudent risk management, disciplined execution, and identifying new avenues of growth — while continuously enhancing operational efficiency to drive sustained performance.
— Vikash Mundhra
Risk, Compliance and Governance are the pillars on which we are moving ahead.
— Vikash Mundhra
51,733 crores as of September 30th, 2025, reflecting a decline of 13% YoY and 2% sequentially.
— Rajeev Mantri
This is the result of steps taken to arrest the decline in EEB book while ensuring that the portfolio controls and guardrails continue to be implemented to manage elevated sectoral risks.
— Rajeev Mantri
44,211 crores, reflecting a 6.5% decline YoY.
— Rajeev Mantri
During the quarter, we have arrested the decline in savings balances, and savings accounts grew sequentially by 3.2%.
— Rajeev Mantri
Slippages in the EEB portfolio were higher at Rs.1,118 crores during the quarter versus Rs.1,089 crores in the preceding quarter, reflecting ongoing stress in the segment.
— Rajeev Mantri
The increase, however, in the EEB SMA- 0 book is largely due to the impact of raising installment demand on holidays.
— Rajeev Mantri
This movement was mainly on account of the full impact of the 75 basis point repo rate reduction implemented in the current quarter, which had a bearing on our advance yields.
— Rajeev Mantri
In addition, the growing share of secured loans in our portfolio and some continued stress from elevated slippages also influenced the margin trajectory.
— Rajeev Mantri
And Q1 of next quarter, we will see a substantial impact of this cost of reduction of our interest rates, the moderation of interest rates, and definitely that will also improve our margin.
— Rajeev Mantri
So, I don’t think, as of now, we see a challenge that we are cognizant of being keeping a very close eye in terms of how things are progressing there.
— Vishal Wadhwa
And you have also said in your opening remark that stress may continue in EEB for 1 or 3 quarters.
— Abhishek Murarka
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Q&A — 11 exchanges
Q
Hello, good evening. I had a couple of questions. Where do you expect the full year and the next year credit costs to settle? I understand that there were holidays, but even so, there is like a 54% increase in SMA-0, which is the sharpest. I know you explained, but even so, where do you see the SMA-0 set and you gave some October number, but where do you see the SMA-0 settling in the third quarter? And also, if you could highlight on the credit cost? That’s my first question. My second question is that your PPoP margin, right, PPoP-to-assets has really fallen to a low in the 2nd Quarter. And i
Rajeev Mantri
So, just to further supplement and clarify on the first point, what we have said is by FY’27 exit is where we are expecting a credit cost of 2.5% to 3% for EEB on a stable state basis. On an overall Bank basis, we will be looking at a credit cost of 1.5% to 1.6%. And that is because we are improving our secured mix as we have already seen. We will continue to endeavor towards that. And also we expect that the recovery in the EEB environment comes through over the ensuing quarters. Partha Pratim Sengupta: So, second part, your SMA-0, as you have already said, that if holidays are there, we cann
Q
Hi, good evening, sir. So, I have a follow-up question on the microfinance business. So, in Bihar, has the MFIN stepped in or have you or some of the large lenders, have you all made some representations or at least issued some guidelines so that your field agents etc. can work without any hindrance? Or if customers tell them that it’s going to be waived, they have some official document to show saying that right now you have to service your loans. So, just the reaction from the industry and the support that you might be getting or might not be getting from the government, if you can comment o
Vishal Wadhwa
Yes, this is Vishal here. In terms of the Bihar, we are watching it very closely in terms of the impact in the last one month or so. In our portfolio, as such, we have seen regular collection, that means the way it’s been happening in the previous quarter. Though we have taken the cognizance in terms of the knowledge which is going around in the political environment out there, but that’s one of the things which is always getting highlighted whenever a state election is happening. We are closely tracking. It’s been performing as expectation and in fact, in the same manner it was performing in
Q
Thank you so much for the opportunity. I was trying to understand, in the housing category also, sequentially NPA has moved up, NPA percentage. Is it again because of the holidays or is there something else in the play here? Because growth is also very strong in the housing category, despite the NPA percentage move up sequentially. I could just like to understand what is...?
Rajeev Mantri
Yes, so I think if I could understand, sorry, the audio is still in and out, but your question is around the housing NPA and the SMA, right? As to what is actually driving that? Yes, housing NPA sequentially moved up, despite being higher growth, like having higher growth. I just would like to understand what is happening there. Sure. So, I think, like MD sir had mentioned earlier, there had been some sort of ballooning related sort of NPA recognition, which had happened sometime back. And we do assessment of that on a quarterly basis, which affects some bit of the housing. However, even if th
Q
Hello. Thanks for taking my question. So, I have a question around your net new EEB customer accretion. So, that has been hovering at the same level for quite a while now, I think for the last 2-3 years now. So, I just wanted to check, do you still believe there’s an increasing penetration story there or you think that the market there has sort of saturated and now it’s all going to market share gains? And the related question is, so when you think about growth for the microfinance industry or for the Bank, where do you see that growth coming from? So, how do you see that growth without that i
Rajeev Mantri
Sorry, Anish, your question just to understand, is the increase in customers or increase in advances? No, net EEB customers, active customers, you disclose it, net EEB active customer number, right? Got it. So, you’re right that we have stagnated in terms of the new borrowers coming in month on month. But as we see, even today, we keep on adding up 1,30,000 - 1,40,000 customers, on an average and in a quarter we add up to 3,50,000-4,00,000 customers. What we also realize when we go for new customers, there are lots of rejects which have increased in the industry due to delinquency and that’s w
Q
Good evening. Thanks for taking my question. Firstly, on funding cost. So, quarter-to-quarter, your cost of funds is, as there is not much movement. Why is that the case? Because your CASA ratio is up. We have taken substantial cuts in our savings rate as well. So, why is cost of funds not yet showing improvement? And related to that, how to think about NIMs going into second half and next year? Because I think at the beginning of the cycle, we had called out that because of the mix shift, the Bank would lose 70-80 basis point of NIMs. And it looks like we are already there. So, how to think a
Param Subramanian
Your CASA ratio is up, quarter-on-quarter and there is a savings cost reduction… Partha Pratim Sengupta: Quarter-on-quarter, it is marginally up. Yes, we have 28%. It increased from 27.1% to 28%. We are marginally up. But the main thing is that because of the fixed deposits, which were adding a very high rate of interest. So, that needs to get moderated and that will get moderated only at the time of renewal for which we need to wait till Quarter 4. A little bit positive impact will come in Q3, but not much. So, Q4 actually the major impact will come. Just to share some numbers, for instance,
Q
Sir, thank you for the opportunity. Sir, this MCLR cut that we have done 200 basis point, is that something to do with RBI telling us or is it basically we have done it according to Reddy. Partha Pratim Sengupta: No, nothing. Let me make it very clear that it has got nothing to do with RBI.
Anand Dama
Okay. So, basically, I am sure that this year’s RBI supervision would be nearly over. Any address comments that basically came through in the RBI report? I think that we cannot pinpoint that. All banks do have a report. But I would say that the major regulatory issues which were there have been already addressed. And where technology dependence is there, these are on the process of getting addressed. So, that much I can say. So, the major regulatory issues what was there, we have already addressed those things. But definitely, whenever you are in any banking operations, there will be some obse
Q
Hi, sir. Good evening. Sir, if you can quantify the MFI slippages in this quarter. And sir, any qualitative reason why the situation did not pan out the way it should have been? Because other banks, all banks which have MFI segment, they have seen 20%, 30%, 40% decline in slippages. So, is this a geographical thing which is a bit of an adverse thing for us? Or why is it that the slippages seems to be elevated or not improved significantly versus others?
Rajeev Mantri
So, maybe I’ll answer both. So, firstly, on the number, the slippages for the EEB, which is Group Loan Service as well both, was Rs. 1,118 crores. This was the gross slippage. And the net slippage was 984 crores. The gross slippage increased marginally from 1,089 to 1,118 during the quarter. On your second question, I think, look, from our perspective, the Bank had already been following the guardrails to a large extent. If you look at it, for us, the Bandhan Plus 2 portfolio was almost close to 90%. And the overleveraging portfolio portion of the EEB was only around 10%. So, that also has imp
Q
Thanks for taking my question. So my question is regarding MFI. So we are seeing that Madhya Pradesh and Bihar and Maharashtra also have some difficulty in collections from some other players. So are you seeing any stress there?
Vishal Wadhwa
So like I said, Bihar is doing reasonably well for us. For us, like I said, Tamil Nadu, Karnataka is a little stressed. Maharashtra is doing reasonably okay for us as far as we are concerned, though I see there is an industry difference from our portfolio compared to the industry portfolio. Industry doesn’t do that well. For us, Gujarat is a little, compared to the industry, a little cause of concern, but not that much to worry because our portfolio in Gujarat and Southern states are much lower if you have to compare. So we are keeping ourselves abreast in terms of and watching Gujarat portfol
Q
I have this question, like, because we have seen different players, because of the risk-based pricing in MFI, they have inched up the yields, like 75 basis points, 100 basis points, different lenders have done different things. But based on the past several quarters, they felt like there is a need to raise yields. Don’t you see any need like that in raising yields for JLG notes, MFI notes? That is my first question.
Vishal Wadhwa
We are not looking at moving any risk-based pricing, because the group concept is cohesive. So, it’s difficult to implement risk-based pricing in a group in many ways. So, we want to continue the way it is in terms of ensuring that we get the right quality book rather than looking at a risk- based pricing, because the group concept is very cohesive when we form a group, and it is very difficult to implement on the ground that we have different risk-based pricing and explain in a particular group. And so, we have been keeping the way in terms of keeping a flat rate at a group level. And we have
Q
Thank you for giving me one more chance at asking questions. I just had one clarification that ECL will be implemented now. So, what would be your overall SMA pool, because that will determine the stage 2 provisions, right? In terms of even other loans. Obviously, you have been transparent enough and you are disclosing the EEB pool regularly, which is very helpful. But what is the total SMA pool including non-EEB? Like say for 0, 1, and 2? Partha Pratim Sengupta: You want the figures as of September 30th or what you want?
Mahrukh Adajania
No, September 30, the total SMA. Are you asking for the SMA as per the current books or SMA as per IndAS new guidelines? You can give either. I mean, you can give both. No. So, look, we are assessing and evaluating. I think the draft guidelines have come through. We are looking at what exactly it would mean for the Bank. I think at this stage, that process is still on. So, currently, I think whatever we have in terms of the DPD books, in terms of the SMA 1, 2, etc., we’ve already included in the investor deck for EEB. So, I think you will be able to see the details there. But the assessment fo
Q
Thank you everyone for joining for the investor call and for patiently listening to the various updates as well as for asking the various questions. And thank you for reposing the trust in the Bank. Thank you so much.
Management
Speaking time
Rajeev Mantri
29
Moderator
13
Mahrukh Adajania
12
Vishal Wadhwa
10
Aravind Ravichandran
7
Hardik Shah
7
Abhishek Murarka
5
Anand Dama
5
Param Subramanian
4
Vatsal Parag Shah
4
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Opening remarks
Vikash Mundhra
Thank you, Dhanesh. Good evening everyone and a very warm welcome to all of you. It’s a pleasure to have you with us today as we discuss Bandhan Bank’s ‘Business and Financial Performance’ for the Quarter and Half Yearly ended September 2025. We apologize for the late start and appreciate your time and continued interest in the Bank. I also hope you all had a joyous festive season and wish you and your family good health, happiness and prosperity in the months ahead. In today’s call, we will take you through our business performance, key achievements and challenges during the quarter. Joining us on the call today are Mr. Partha Pratim Sengupta – Managing Director and Chief Executive Officer, Mr. Ratan Kumar Kesh – Executive Director and Chief Operating Officer, Mr. Rajinder Kumar Babbar – Executive Director and Chief Business Officer, Mr. Rajeev Mantri – Chief Financial Officer, myself, Vikash Mundhra – Head of Investor Relations and other members of our Senior Management Team. After t
Rajeev Mantri
Thank you, Partha sir. I welcome everyone to the earnings call. We will now move on to the business performance for the quarter. I will walk you through the key financial highlights and provide an overview of how we have performed. We will start with the advances. As of September 2025, the gross advances stood to Rs. 1.4 lakh crores, reflecting a growth of 7% YoY and on a sequential basis, the growth was healthy at 5%. Our Emerging Entrepreneur Business or EEB portfolio stood at Rs. 51,733 crores as of September 30th, 2025, reflecting a decline of 13% YoY and 2% sequentially. However, if we adjust for the technical write-offs undertaken during the quarter, the portfolio would have remained broadly flat on a sequential basis. This is the result of steps taken to arrest the decline in EEB book while ensuring that the portfolio controls and guardrails continue to be implemented to manage elevated sectoral risks. With the operating environment showing some signs of recovery, we are expecti
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