Bandhan Bank Q3 FY26 Profitability Rises as Margins Improve and Deposits Grow

Bandhan Bank reported a sharp rebound in profitability for Q3 FY26, supported by improving margins and steady growth in deposits and loans. At a board meeting in Kolkata on January 22, 2026, the bank approved results for the quarter and nine months ended December 31, 2025, highlighting stronger quarterly trends despite pressure from elevated provisions.

For the quarter ended December 31, 2025, profit after tax rose to Rs 206 crore, compared with Rs 112 crore in Q2 FY26, an 84% sequential increase. Net revenue for Q3 FY26 came in at Rs 3,379 crore, up 7.8% quarter-on-quarter from Rs 3,135 crore, indicating improving operating performance across key business segments.

Net Interest Income for Q3 FY26 increased 3.8% quarter-on-quarter to Rs 2,688 crore, versus Rs 2,589 crore in Q2 FY26. The Net Interest Margin improved to 5.9% in Q3 FY26 from 5.8% a quarter earlier, helped by a better asset mix and relatively stable funding costs, supporting the bank’s core lending income.

Asset quality indicators stayed broadly stable during the quarter. EEB loan collection efficiency in Q3 FY26 reached 98.2%, reflecting tight underwriting standards and disciplined recovery practices. The Provision Coverage Ratio, including technical write-offs, stood at 84.3% on December 31, 2025, providing a sizeable buffer against anticipated credit stress in the portfolio.

Total deposits as on December 31, 2025, stood at Rs 1.57 lakh crore, compared with Rs 1.41 lakh crore a year earlier, marking 11% year-on-year growth. The CASA ratio remained at 27%, with CASA balances at Rs 42,730 crore. Around 72% of overall deposits came from CASA and retail term deposits, indicating a granular, relatively low-cost funding base.

Metric	Q3 FY26	Q2 FY26 / 9M FY25
Net Revenue (Quarter)	Rs 3,379 crore	Rs 3,135 crore (Q2 FY26)
NII (Quarter)	Rs 2,688 crore	Rs 2,589 crore (Q2 FY26)
Profit After Tax (Quarter)	Rs 206 crore	Rs 112 crore (Q2 FY26)
Net Revenue (9M)	Rs 9,997 crore (9M FY26)	Rs 11,002 crore (9M FY25)
NII (9M)	Rs 8,034 crore (9M FY26)	Rs 8,735 crore (9M FY25)

On the lending side, gross advances increased to Rs 1.45 lakh crore as of December 31, 2025, from Rs 1.32 lakh crore a year earlier, recording 10% year-on-year growth. Growth was broad-based, with strong traction in retail. The retail loan book expanded 57% year-on-year, while wholesale banking advances recorded 32% growth over the same period.

Bandhan Bank financial performance for 9M FY26

For the nine months ended December 31, 2025, overall performance showed pressure from heightened provisioning, despite resilient core margins. Net revenue in 9M FY26 was Rs 9,997 crore, compared with Rs 11,002 crore in 9M FY25. Net Interest Income for the nine months declined to Rs 8,034 crore from Rs 8,735 crore in the corresponding period last year.

The Net Interest Margin for 9M FY26 held at 6.0%, unchanged from the previous year, underscoring the strength of the lending franchise despite lower NII. Operating profit for 9M FY26 stood at Rs 4,424 crore, down from Rs 5,817 crore in 9M FY25, largely reflecting higher credit costs and a cautious stance on provisioning.

Provisions and contingencies, excluding tax, rose to Rs 3,454 crore for 9M FY26, compared with Rs 2,505 crore in 9M FY25. This increase signalled a conservative approach towards asset quality and balance sheet protection. Despite these higher buffers, the bank maintained profitability across the nine-month period.

Bandhan Bank results, profitability and strategic outlook

Profit after tax for the nine months ended December 31, 2025, stood at Rs 689 crore, versus Rs 2,427 crore in 9M FY25. Return ratios aligned with the impact of these provisions. On an annualised basis for 9M FY26, Return on Assets was 0.5%, and Return on Equity stood at 3.6%, reflecting the drag from incremental credit costs.

MD & CEO, Partha Pratim Sengupta said, "Bandhan Bank's third quarter performance over the last quarters reflects the strengthening fundamentals and steady turn around. In Q4, we are set to accelerate multiple digital initiatives aimed at enhancing customer experience, operational efficiency, and scalability. We remain fully committed to building a strong, more resilient and more diversified bank. These efforts position us well for sustainable and profitable growth going forward."

Bandhan Bank continued to scale its physical presence alongside its financials. The bank operated more than 6,350 banking outlets across 35 of India’s 36 states and union territories as of December 31, 2025. Customer relationships reached about 3.25 crore, supporting a deposit base of Rs 1.57 lakh crore and advances of Rs 1.45 lakh crore at that date.

Overall, Q3 FY26 showed a clear improvement in quarterly profitability, healthier margins, and continued growth in deposits and advances for Bandhan Bank. The nine-month performance reflected cautious provisioning and moderated return ratios, while strong coverage levels, expanding retail portfolios, and ongoing digital initiatives framed the bank’s strategy for stable, profitable growth.