Bandhan Bank

Bandhan Bank made strong progress in its digital transformation agenda, enhancing its Corporate Internet Banking platform and scaling Merchant Acquiring and Payments capabilities. Key initiatives included onboarding Razorpay as a payment gateway partner and launching an In-App Collection Solution. Within the EEB group loan portfolio, the bank introduced real-time SMS acknowledgements for cash collections and a real-time digital dashboard for Operations Executives. Product enhancements included 18-month and 36-month tenure options and expanded bi-weekly and monthly repayment frequency options to offer greater flexibility to customers.

As part of efforts to strengthen the balance sheet, Bandhan Bank executed the sale of NPAs and written-off accounts to ARCs. The bank sold ₹3,707 crores of written-off portfolio at a valuation of roughly 9%, receiving ₹126 crores in cash under 'Other Income'. Additionally, ₹3,165 crores of NPAs from unsecured EEB and ABG books were sold at around 18% valuation, generating ₹303 crores in cash. These actions were used to offset provisions and reflect a continued focus on disciplined resolution of stressed assets.

The Government of India formally notified four Labour Codes on November 21, 2025. Following a detailed assessment, Bandhan Bank created an incremental provision of ₹120 crores towards gratuity during the quarter. This provision, primarily arising from changes in wage definition, was accounted for under employee cost in the P&L, impacting the quarter's profitability.

Gross advances stood at ₹1.45 lakh crores, growing 10% YoY and 4% sequentially. Adjusting for the NPA sale, underlying advances growth was higher at 12% YoY and 6% QoQ. The EEB portfolio stabilized, reversing earlier degrowth, and showed 2% QoQ growth when normalized for the NPA sale. The non-EEB portfolio demonstrated strong, broad-based growth at 25% YoY, now accounting for nearly 65% of total advances. The secured book grew 27% YoY and now constitutes 57% of total advances, reinforcing the bank's improving risk profile.

Total deposits reached ₹1.57 lakh crores, growing 11% YoY, outpacing advances growth. Retail term deposits maintained strong momentum, growing 36% YoY. CASA deposits, however, declined 4% YoY to ₹42,730 crores, influenced by savings rate reductions and an outflow of high-value, rate-sensitive balances. The bank deliberately pared down high-cost bulk deposits, which declined 6% QoQ and now represent about 28% of total deposits, to improve the quality of its liability profile. This strategy, coupled with lower cost of funds, contributed to a sequential improvement in NIM to 5.9%.

Asset quality trends were constructive, with overall collection efficiency (excluding NPAs) improving to 98.1% in December 2025 from 97.8% in September 2025. Gross slippages declined to ₹1,314 crores in Q3 FY26 from ₹1,590 crores in the preceding quarter, with the largest improvement in the EEB segment. Following the ARC sale, Gross NPA ratio improved sharply to 3.3% and Net NPA declined to 1.0%. Early-delinquency buckets (0-90 DPD) in EEB also showed improvement, with the combined pool reducing to ₹2,310 crores (4.6% of EEB advances) from ₹2,497 crores (4.8%) in the prior quarter.

Net Interest Income (NII) for Q3 FY26 was ₹2,688 crores, showing a 3.8% sequential improvement. Operating expenses rose 6% sequentially to ₹1,934 crores, largely due to the ₹120 crores gratuity provision. Operating profit for the quarter stood at ₹1,445 crores. The bank reported a Net Profit of ₹206 crores for Q3 FY26, compared to ₹426 crores a year ago and ₹112 crores in the previous quarter. Profitability ratios for Q3 FY26, RoA at 0.4% and RoE at 3%, reflected the combined impact of one-off^📎 items and the costs associated with NPA reduction measures.

To address asset quality concerns in the housing finance segment, Bandhan Bank has implemented significant changes. This includes separating onboarding, underwriting, and operations functions, which were previously handled by the same person. The bank is streamlining its underwriting process with new, rules-driven business rules and focusing on structured information rather than personal data. Efforts are also underway to increase the share of the salaried segment, which currently stands at 56% in the housing loan portfolio. Additionally, 57 GRUH Finance centers have been converted into full-fledged banking branches, with others gradually becoming banking units, to integrate processes and improve quality.