More Stories

Informist, Tuesday, Oct. 28, 2025

By Shubham Rana

NEW DELHI – Bandhan Bank Ltd. is expected to report a year-on-year fall in its net profit for the second consecutive quarter with slow business growth, lower margins, and higher provisions likely to weigh on the September quarter, according to brokerages tracking the bank.

The private sector bank's September quarter net profit is seen falling 60% on year to INR 3.79 billion, according to the average of estimates by nine brokerages. Sequentially, the net profit is seen rising 1.8%. In the June quarter, Bandhan Bank's net profit had declined 65% on year to INR 3.72 billion, the steepest fall in five quarters.

The highest estimate for the bank's September quarter net profit is INR 5.60 billion by Emkay Global Financial Services Ltd. and the lowest estimate is INR 2.40 billion by Nomura Equity Research. The bank will release its September quarter financial results Thursday.

The bank is expected to report slow business growth in the September quarter with loans rising 7.2% on year to INR 1.40 trillion as on Sept. 30, as per provisional figures released by the bank. Loan growth was much lower than the growth in deposits, which grew 11% to INR 1.58 trillion. Bandhan Bank's management had said in July that it expects disbursement growth to pick up to around

10-15% from the December quarter.

Bandhan Bank's net interest income – the difference between interest earned and expended — for the September quarter is seen at INR 27.06 billion, according to an average of estimates from nine brokerages. This would be down 8.2% on year and 1.9% on quarter.

The net interest margin is seen narrowing over 100 basis points on year in the September quarter to around 6.0%; it was 6.4% in the June quarter. Margins are expected to be lower across the banking sector in the September quarter following the 100-bps reduction in the policy repo rate by the Reserve Bank of India's Monetary Policy Committee between February and June.

The projected sequential fall in Bandhan Bank's margin is more than the decline seen by other private sector lenders in the September quarter. According to Nomura Equity Research, Bandhan's net interest margin is seen falling "due to de-growth in higher yielding MFI (microfinance) segment, repo rate cuts and interest reversals."

Emkay Global Financial Services Ltd. said Bandhan Bank could see stress in the microfinance segment, which makes up nearly half of the lender's total loan book, from seasonal factors such as floods. This could lead to higher slippages, the brokerage said.

"We expect slippages (INR 14 billion) as there is stress in the MFI industry (situation is improving but still trends are yet to normalise)," Kotak Securities Ltd. said in an earnings preview report. ICICI Securities Ltd. expects slippages to rise to around INR 16 billion in Jul-Sept. The bank saw INR 15.5 billion of fresh slippages in the June quarter.

The stress in the microfinance sector is also expected to keep credit costs high, brokerages said. Nomura sees credit cost rising nearly 150 bps on year to 3.6% and ICICI Securities sees it at 3.0%, up over 100 bps on year. The bank's credit cost had risen 184 bps on year in the June quarter to 3.5%. The bank's management had said in July that it anticipates challenges to persist in the microfinance sector till the September quarter.

The bank's asset quality is seen largely stable. ICICI Securities sees the gross non-performing ratio staying flat on quarter around 5.0%. The brokerage sees the net NPA ratio at 1.3% as of Sept. 30, only a tad lower than a quarter ago.

The bank's provisions are seen rising sharply year-on-year in the September quarter. Analysts at Nomura see Bandhan Bank's provisions doubling from a year ago to around INR 12 billion in the September quarter while Kotak Securities Ltd. expects a 70% on year rise in loan-loss provisions. The bank's provisions had more than doubled in the June quarter as well to INR 11.5 billion.

Brokerages said commentary on Bandhan Bank's asset quality, situation of the microfinance portfolio, and margin trajectory would be key. They have a mixed view on the bank's stock price. Of the 13 brokerage reports on the bank available with Informist, five have a 'buy' rating with an average target price of INR 191. Six brokerages have a ‘hold' rating on the stock at an average price of INR 184 and two brokerages have a 'sell' rating.

The bank's share price has fallen 8% since it released its June quarter earnings on Jul. 18. Shares of the bank Tuesday closed 2.1% higher at INR 175.62 on the National Stock Exchange.

The following are the Jul-Sept earnings estimates for Bandhan Bank from nine brokerages in descending order of the estimate of net profit in INR million:

End

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

Edited by Vandana Hingorani

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd. by NSE Data & Analytics Ltd., a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt. Ltd.

Informist Media Tel +91 (22) 6985-4000

Send comments to feedback@informistmedia.com

© Informist Media Pvt. Ltd. 2025. All rights reserved.