Bandhan Bank reported a sharp rise in profit for the July-September quarter of FY27, with net profit increasing to ₹622 crore from ₹112 crore a year ago. The improvement was largely driven by lower provisions for potential loan losses, along with growth in the bank’s operating profit. However, the weak performance in the year-ago quarter also makes the increase appear larger.
Here’s a closer look at the Bandhan Bank Q2 results, the key financial figures, improvements in asset quality and what investors should watch next.
Bandhan Bank Q2 FY27 Results: Key Numbers
| Particulars | Q2 FY27 | Q2 FY26 | Change |
| Net profit | ₹621.75 crore | ₹111.87 crore | Over 5x (+456%) |
| Net interest income (NII) | ₹2,960 crore | ₹2,589 crore | +14% |
| Operating profit | ₹1,556 crore | ₹1,310 crore | +19% |
| Provisions and contingencies | ₹718 crore | ₹1,153 crore | Down about 38% |
| Gross NPA | 3.11% | 5.02% | Down |
| Net NPA | 0.92% | 1.30% | Down |
Compared with the previous quarter (Q1 FY27), net profit rose about 24% to ₹502 crore. Operating profit rose about 15%. Total income, which includes all interest and fee earnings, rose 9.5% to ₹6,458 crore.
Bandhan Bank’s net interest income is the gap between what the bank earns on loans and what it pays on deposits. Net interest margin (NIM) shows how much interest income a bank earns from its interest-earning assets relative to their value. Bandhan Bank’s NIM was 6.1% in Q2 FY27, compared with 6.2% in the previous quarter and 5.8% a year earlier.
Why Did Bandhan Bank’s Profit Jump?
There are two reasons. One is better core earnings and the other is lower provisions.
On core earnings, the bank earned more from its lending business. Operating profit, which is profit before setting aside money for bad loans and tax, rose by about ₹246 crore from a year ago.
On provisions, the bank set aside ₹718 crore this quarter, against ₹1,153 crore a year ago. That is a saving of about ₹435 crore.
Based on these figures, lower provisions explain roughly two-thirds of the rise in pre-tax profit. The rest comes from higher operating profit. So the jump is real, but it leans more on lower bad-loan costs than on a sharp rise in earnings.
The base also matters. Q2 FY26 was a poor quarter, with profit down 88% from the year before. Bandhan Bank earned ₹937 crore in Q2 FY25. This quarter’s ₹622 crore is a recovery, but profit is still well below that level.
What Do the Asset-Quality Numbers Show?
Bandhan Bank’s asset quality improved over the year. Gross NPA (non-performing assets) is the share of loans where borrowers have stopped paying. It fell to 3.11% from 5.02%. Net NPA is what remains after the bank sets aside money against those bad loans. It fell to 0.92% from 1.30%.
Compared with the previous quarter, however, there was little change. Management described both ratios as stable. Credit cost, which measures actual and expected loan losses as a share of the bank’s loan book, stayed at about 1.8%.
Collection efficiency in the microfinance-linked Emerging Entrepreneurs Business (EEB) segment was 99.3%. The provision coverage ratio was 71.2%. It rises to 86.7% if write-offs are included.
One good quarter does not guarantee that the improvement will continue. It shows the bad-loan pressure has eased for now.
How Did the Market React?
Bandhan Bank shares closed 2.27% higher at ₹155.36 on the NSE on October 28, the day the results were announced.
On October 29, the Bandhan Bank share price was ₹157.45 on the NSE at around 10:01 am IST, up 1.35% from the previous close. This is an intraday price, not a closing price. The stock’s movement should be seen in the context of the wider market as well as the bank’s earnings.
Brokerage views after the results were mixed. These are the brokerages’ own estimates, not recommendations from InvestikFuture:
- CLSA: Accumulate rating, target price cut to ₹195 from ₹235.
- Nomura: Neutral rating, target price cut to ₹175 from ₹190.
What Should Investors Watch Next?
- Loan growth: Loans and advances rose 13.1% year-on-year to ₹1.58 lakh crore as of September 30, according to the bank’s business update. Management has guided for about 14% loan growth in FY27.
- Deposits and CASA: Deposits rose 9.2% to ₹1.73 lakh crore. The CASA ratio, the share of cheaper savings and current account deposits, fell about 270 basis points from the previous quarter to 26.7% after a cut in savings account rates. A lower CASA share can push up funding costs.
- Margins: Management expects NIM to stay in the 6.1-6.2% range. It expects most of the benefit from repo-rate cuts to show up in Q4.
- Provisions: Management indicated on the earnings call that credit cost could ease from about 1.8% to 1.7%. Another rise in bad loans would hurt profit quickly.
- New provisioning norms: Banks are moving to expected credit loss (ECL) norms, where money is set aside for losses based on expected defaults rather than only actual ones. Investors should watch how this change affects the bank’s provisions and capital.
Conclusion
Bandhan Bank’s Q2 profit recovered sharply, and bad loans are lower than a year ago. But much of the gain comes from lower provisions and a weak base. The falling CASA ratio and the move to new provisioning norms are the main points to track. Investors should watch whether the next few quarters hold these numbers.
FAQs
What was Bandhan Bank's net profit in Q2 FY27?
Net profit was ₹622 crore, against ₹112 crore in Q2 FY26 and ₹502 crore in Q1 FY27.
Why did Bandhan Bank's profit increase?
Lower provisions were the biggest factor. Provisions fell to ₹718 crore from ₹1,153 crore. Higher operating profit also helped. The low base of last year's weak quarter adds to the size of the jump.
What is Bandhan Bank's net interest income?
Net interest income was ₹2,960 crore, up 14% from ₹2,589 crore a year ago. It was up about 1.4% from the previous quarter.
Did the bank's asset quality improve?
Yes, over the year. Gross NPA fell to 3.11% from 5.02% and net NPA to 0.92% from 1.30%. Against the previous quarter, both were broadly unchanged.
What should investors watch after the results?
Loan growth, CASA ratio, margins, provisions, and the impact of the new credit loss norms.
ARN Disclosure: Investik Future is an AMFI-registered Mutual Fund Distributor. ARN-341107 — Verify on AMFI ↗. Komal Thakur is the content author and digital marketer; the ARN registration belongs to Investik Future, not to the author personally.
