Bandhan Bank Q2 Profit Plunges 88% Amid Rising NPAs and Declining Income

Shares of

nk faced pressure on Friday after the lender disclosed a sharp 88% year-on-year (YoY) drop in net profit for the July-September quarter of FY26, underscoring ongoing challenges in asset quality and revenue generation. On October 30, Bandhan Bank reported a consolidated net profit of just Rs 112 crore, a stark contrast to the Rs 937 crore earned in Q2 FY25. The downturn was exacerbated by a 12% YoY decline in net interest income (NII), which fell to Rs 2,589 crore from Rs 2,934 crore a year earlier. Asset quality emerged as a major concern, with gross non-performing assets (NPAs) surging nearly 15% YoY to Rs 7,015 crore, pushing the gross NPA ratio to 5.02%. Net NPAs also climbed 14% YoY to Rs 1,843 crore, lifting the net NPA ratio to 1.37% from 1.29% in the prior year. This deterioration contributed to a dismal return on assets of 0.06% for the quarter. The results highlight persistent headwinds in Bandhan Bank's microfinance-heavy portfolio, including regulatory scrutiny and economic slowdowns affecting borrower repayments. Analysts anticipate further provisions and recovery efforts in the coming quarters to stabilize the bank's balance sheet.