Why Did Bandhan Bank Experience a 65% Profit Drop?
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Synopsis
In a surprising turn of events, Bandhan Bank has reported a dramatic 65% drop in net profit for Q1 FY26, highlighting significant challenges in the financial landscape. CEO Partha Pratim Sengupta shares insights into the bank's performance and strategies moving forward amidst a complex operating environment.
Key Takeaways
- Net profit dropped by 65% YoY.
- Net interest income declined by 7.7%.
- Deposits increased by 16% YoY.
- Net operating profit fell by 14% YoY.
- Customer base reached 3.14 crore.
Mumbai, July 18 (NationPress) Bandhan Bank, led by Partha Pratim Sengupta, has reported a staggering 65% decline in its net profit year-on-year (YoY) for the first quarter of the current financial year (Q1 FY26). The bank's earnings plummeted to Rs 372 crore from Rs 1,064 crore during the same period last year (Q1 FY25).
This drop in profit coincided with a reduction in the bank's net interest income (NII), which fell by 7.7% to Rs 2,757.2 crore compared to Rs 2,986.6 crore in Q1 FY25, according to the bank's stock exchange filing.
During the quarter, the bank reported a net interest margin (NIM) of 6.4%. Despite the YoY decrease, there was a notable improvement on a sequential basis.
In fact, the net profit showed a 17% increase compared to the previous quarter, according to the company's regulatory filing.
For the June quarter, Bandhan Bank's total revenue was Rs 3,483 crore, slightly down from Rs 3,533 crore in the same quarter last year.
The net operating profit also experienced a 14% YoY decline, dropping to Rs 1,668 crore from Rs 1,941 crore in Q1 FY25.
On commenting about the results, Partha Pratim Sengupta, the Managing Director and CEO, noted that the bank had shown a sequentially improving performance, driven by robust growth in deposits and consistent momentum in both retail and wholesale banking.
He acknowledged that the overall operating environment is tough, but emphasized that the bank's results demonstrate the resilience of its business model and the effectiveness of its strategy.
As of June 30, Bandhan Bank's total deposits surged 16% YoY to Rs 1.55 lakh crore, up from Rs 1.33 lakh crore a year earlier.
Retail term deposits experienced significant growth, increasing by 34% to Rs 63,661 crore, with retail deposits making up 68% of the total deposit base.
The gross advances for the quarter rose by 6% to Rs 1.34 lakh crore, compared to Rs 1.26 lakh crore in the previous year.
Bandhan Bank's customer base now stands at 3.14 crore, supported by an extensive distribution network of nearly 6,350 outlets and a workforce exceeding 73,000 employees.
Before the earnings announcement, Bandhan Bank's shares concluded the day marginally higher, rising by 0.11% to Rs 185.40 per share on the National Stock Exchange (NSE).
Point of View
It’s vital to acknowledge the significant challenges Bandhan Bank faces, yet the resilience shown by the management and the growth in deposits is commendable. While the 65% profit drop raises concerns, the bank's strategic response and customer growth signal a potential turnaround.
NationPress
21/07/2025
Frequently Asked Questions
What caused the profit drop for Bandhan Bank?
The profit drop was primarily due to a decline in net interest income and the challenging economic environment.
How much did Bandhan Bank's net profit decline?
Bandhan Bank's net profit fell by 65%, dropping to Rs 372 crore.
What is the net interest margin for Bandhan Bank?
Bandhan Bank's net interest margin stood at 6.4% for the quarter.
What growth did the bank see in deposits?
The bank reported a 16% year-on-year increase in total deposits.
What is the current customer base of Bandhan Bank?
Bandhan Bank's customer base currently stands at 3.14 crore.
