Bandhan Bank Q1 FY26 Net Profit Falls 65% Amid Microfinance Stress

Sharp Decline in Profit Due to Microfinance Pressures

Bandhan Bank reported a significant 65% drop in net profit for the first quarter of FY 2026, posting Rs 372 crore compared to Rs 1,063 crore during the same period last year.
Partha Pratim Sengupta, Managing Director and CEO of Bandhan Bank, attributed the steep decline to stress in the bank’s microfinance asset portfolio.

Rising Provisions and Slippages Impact Performance

Despite an 11% year-on-year growth in total business, which rose to Rs 2.8 lakh crore, the bank faced challenges from increasing provisions. The bank reported a 119% rise in provisions, mainly due to write-offs and high slippages in its microfinance (EEB) segment.

“The loan book could not be expanded because of regulatory guardrails. However, those regulations were necessary. We expect conditions to improve starting Q3,” said Sengupta.

EEB Segment Contributes Heavily to Slippages

Fresh slippages during the first quarter stood at Rs 1,553 crore, with the EEB (microfinance) segment alone accounting for Rs 1,080 crore.
Rajinder Kumar Babbar, Executive Director and Chief Business Officer of Bandhan Bank, stated that provisions and contingencies charged to the profit and loss account reached Rs 1,147 crore, up from Rs 523 crore in the same quarter last year.

Deposit Growth and CASA Ratio Steady

Despite the profit decline, the bank recorded a healthy 16% year-on-year growth in deposits. The total deposit base now stands at Rs 1.5 lakh crore, while total advances have reached Rs 1.3 lakh crore.
“The CASA (current and savings account) ratio remains stable at 27% of total deposits,” Babbar noted.