Bandhan Bank’s Q1 profit up 35% on lower provisions, asset quality improves | Company Results

Bandhan Bank on Tuesday reported a 35 per cent year-on-year (YoY) rise in net profit to Rs 502 crore for the April-June quarter of FY27 (Q1FY27), aided by a drop in provisions. On a sequential basis, net profit was down 6.1 per cent.

 

Its net interest income (NII) rose 6 per cent YoY to Rs 2,921 crore in Q1, despite healthy growth in advances. Meanwhile, non-interest income declined nearly 17 per cent YoY to Rs 600 crore.

 

The bank’s net interest margin (NIM) was up 2 basis points (bps) sequentially to 6.2 per cent, although it was down 16 bps on a YoY basis. NIM is a measure of banks’ profitability.

 
 

The lender’s slippages increased marginally in Q1FY27 to Rs 1,080 crore, compared with Rs 1,030 crore in Q4FY26. In Q1FY26, the lender’s slippages stood at Rs 1,550 crore.

 

Provisions for the quarter stood at Rs 680 crore, down over 40 per cent YoY from Rs 1,150 crore in Q1FY26.

 

Its asset quality improved in the quarter, with the gross non-performing asset (NPA) ratio declining 12 bps sequentially to 3.1 per cent. Net NPAs also declined 4 bps sequentially to 0.9 per cent.

 

Its advances grew 16.4 per cent YoY to Rs 1.55 trillion, with the retail book growing 45 per cent YoY, the wholesale book growing 38 per cent YoY, and the housing book growing 6 per cent YoY. Meanwhile, the bank’s microfinance portfolio declined marginally to Rs 52,641 crore in Q1FY27 from Rs 52,812 crore.

 

Compared with advances growth of over 16 per cent, the bank’s deposit growth was just 6.6 per cent YoY to Rs 1.64 trillion, as the bank reduced its bulk deposits to bring down the cost of funds.

 

“The bank has consciously reduced its reliance on bulk deposits due to their higher cost and volatility, focusing instead on growing retail deposits, which are more stable and cheaper. Bulk deposits declined by around Rs 7,000 crore, or 12.7 per cent year-on-year, while retail deposits grew 16 per cent YoY,” said Partha Pratim Dasgupta, managing director and chief executive officer (MD & CEO), Bandhan Bank.

 

He highlighted that deposit mobilisation remains challenging across the banking sector as households are increasingly allocating savings to alternative investment avenues. As a result, banks will need to diversify their funding sources instead of relying solely on deposits.

 

The bank is looking at market borrowings, which are cheaper than bulk deposits and do not attract Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR) requirements. It is also evaluating other funding avenues, including securitisation of its loan assets.

 

On the FCNR(B) deposit scheme, the bank has mobilised around Rs 30 crore so far, Dasgupta said, adding that it expects inflows to pick up over the next two months. The bank is also finalising its leverage policy for FCNR(B) deposits.