According to MD and CEO Partha Pratim Sengupta, the bank’s profitability is being impacted by microfinance stress and quicker rate transmission, but he anticipates a recovery as deposit costs decline. Private lender Bandhan Bank’s post-tax earnings dropped from ₹937 crore in the same time last year to ₹112 crore in the second quarter of the current fiscal year. The bank’s net interest income was ₹2,589 crore as opposed to ₹2,934 crore during the same period last year.
Partha Pratim Sengupta, MD and CEO of Bandhan Bank, blamed the lower-than-expected performance in Q2FY26 on a mix of greater slippages, transfer of interest rates, and muted growth in microfinance advances. “We proactively passed on the 75-basis-point repo cut in the first quarter to our customers on the first day of Q2, which has an immediate effect on the margins.”
Sengupta told analysts on the company’s results call, “We anticipate seeing the full benefit of lower funding costs as the repricing of deposits takes place over the next few quarters, which will help improve margins and support profitability.”
“Slippages remained elevated, reflecting the ongoing stress in the EEB (microfinance) segment, which was expected to be corrected during the quarter but appears to be going to last for one to two months.”
According to Sengupta, “growth in the EEB portfolio remains subdued as the full impact of the industry-level guardrails is taking a longer time to materialize than anticipated.” The growth in advance occurred primarily at the end of the quarter, which had little bearing on the second quarter’s profit and loss.
