BANDHAN BANK LTD (NSE: BANDHANBNK) Q3 2026 Earnings Call dated Jan. 22, 2026
Corporate Participants:
Partha Sengupta — Managing Director and Chief Executive Officer
Rajiv mantri — CFO
Analysts:
VIKASH MANDRA — Analyst
Presentation:
operator
Foreign. Ladies and gentlemen, good day and welcome to the Bandhan Bank Limited Q3FY26 earnings conference call. As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing Star and then zero on your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Vikash Mundra, head of Investor Relations team. Thank you. And over to you, sir.
VIKASH MANDRA — Analyst
Thank you, Father. Good evening everyone and a warm welcome. It’s great pleasure to have you with us as we review Bandhan Bank’s business and financial performance for the quarter and nine months ended December 2025. We truly appreciate your time, your continued support and your participation on today’s call. I hope the year has begun on a positive note for you and your families. And I wish all of you a. Healthy, successful and fulfilling 2026. Joining me today are Mr. Partha Pratim Sengupta, M.D. and CEO Mr. Ratan Kumar Keshe, Executive Director and Chief Operating Officer. Mr. Rajendra Kumar Babbar, Executive Director and Chief Business Officer. Mr. Rajiv Mantri, Chief Financial Officer. And I am Vikash Mundra, Head of Investor Relations. Along with our senior management team, we. Will take you through the key business. Trends, achievements and challenges during the quarter. Followed by a Q and A session after the management’s remark. With that, I invite our MDN CEO Mr. Pathapatim Sengupta to share his perspective on the quarter’s performance. Over to you, sir.
Partha Sengupta — Managing Director and Chief Executive Officer
Thank you, Vikash. Good evening and thank you for joining us today. On behalf of Bandhan Bank, I am. Pleased to extend a very warm welcome. To all participants on our earnings call. For the third quarter of FY26. I hope you and your families had a wonderful start to the new year and I wish you continued good health, prosperity and success in the months ahead. This quarter was marked by strengthening across our core businesses. In line with our strategic focus on quality growth. We saw steady momentum in advances, improvement in the EB book or more popularly. Known as the Microfinance book and further strengthening of the secured book. On the liability side, our continued push towards granularity resulted in stronger retail mobilization and a calibrated reduction in high cost bulk deposits. Margins improved sequentially as the cost of. Funds eased and asset quality trends moved. In the right direction with lower stress formation and reduced NPAs. While these are positive outcomes, we remain. Sharply focused on accelerating CASA and improving asset quality. Further, before I move into the financial. And operational performances for the quarter, let me begin by highlighting a few key initiatives we undertook during this period. These initiatives reflect our continued focus on enhancing our products and services through innovation. And strengthening our ability to serve customers more efficiently. During the quarter aligned with our digital. Transformation agenda, we made strong progress with. We enhanced the Bandhan corporate Internet banking. Platform with a better user experience, stronger. Security and access through partners like buildesk and cashfree. We also implemented real time transaction monitoring to proactively identify and mitigate risks of. Our clients in merchant acquiring and payments. We continue to scale our capabilities, we onboarded reserve pay and as a payment gateway partner supporting key sectors such as government, utilities and education. Our POS terminals now integrate directly with customers ERP systems, improving efficiency and reducing manual reconciliation. Additionally, we launched our In App Collection solution enabling mobile based payment acceptance without physical devices. Overall, these upgrades strengthen our digital ecosystem and position us well to support the evolving needs of our corporate and institutional clients. Let me now walk you through some of the key initiatives undertaken during the quarter to strengthen our control framework and enhance our product offerings within the EEB Group loan portfolio.
Starting with control enhancements, we focused on improving transparency, accuracy and customer communication. First, we introduce real time SMS acknowledgments for cash collections made during group meetings through our tablet based systems. This ensures customers receive immediate confirmation of. Their payments, reinforcing trust and transparency. Second, we launched a real time digital dashboard for our operations executives. This enables more effective monitoring and reconciliation of transactions conducted by our relationship officers during group meeting, significantly improving timeliness and accuracy. Third, we initiated pilot testing of Bluetooth enabled portable printers and now also completely integrated tablets with printers to issue instant. Printed receipts at the point of collection. This further enhances clarity of communication and builds greater confidence among customers. On the product enhancement side, our efforts were centered on offering greater flexibility and convenience to our customers. We introduced 18 month and 36 month tenure options in group loans, providing customers with more choice to match their repayment schedules to their cash flow cycles. Additionally, we have expanded repayment flexibility by offering biweekly and monthly repayment frequency options, reducing repayment stress and enabling better financial planning for customers. Overall, these initiatives underscore our continued commitment to strengthening controls, elevating customer experience and expanding flexibility across our product suite.
Let me now take a moment to highlight two significant developments during the quarter that had a notable impact on our financials. The first relates to the portfolio sale of NPAs and return of accounts to ARCs and the second pertains to the impact of the newly notified labor codes. As part of our ongoing effort to. Strengthen the balance sheet, we executed the. Sale of NPAs and written off accounts of unsecured EB and ABG portfolio, mostly unsecured to ARC. During the quarter we sold 3707 crores. Of write off portfolio also which was realized at a valuation of roughly 9%. Out of the total security receipts issued for this portfolio, our shares stood at 62%. On the cash side we received rupees 126 crore and this inflow has been recorded under other incomes. In addition to this, we also sold 3165 crore of NPAs unsecured loan in the EB and ABG book at a valuation of around 18%. Our share of SRS for this pool was approximately 47%. The transaction generated rupees 303 crores of cash for the bank and this has been used to offset our provisions under the provisions line item in the P.
And L. Together these actions reflect our. Continued focus on strengthening the balance sheet while ensuring disciplined resolution of stressed assets. The second key development relates to the new Labor Codes. On 21 November 2025, the Government of India formally notified the four Labor Codes. The bank has undertaken a detailed assessment. Of their impact wherever applicable, particularly with. Respect to the revised definition of wages. As a result of this assessment, we have created an incremental provision of Rupees 120 crore towards gratuity during the quarter. This provision, which primarily arises from the change in wage definition, has been accounted for under employee cost in the P. And L. I now move to the. Performance of bandhan bank for Q3FY26 and nine month FY26. The quarter demonstrated several underlying strengths across our core businesses. Our advances continue to show healthy momentum. With underlying growth remaining strong even after. Accounting for the recent npsl. The EEB portfolio has stabilized reversing the earlier trend of degrowth and our secured book continues to strengthen, improving the secured. Mix Further on the liability side, deposit. Granularity improved meaningfully supported by strong retail deposit mobilization even as we deliberately pared down high cost bulk deposits to improve the quality of our liability profile. Margins also showed an encouraging upward turn aided by a sustained reduction in the cost of funds and improving deposit mix. Asset quality trends were constructive with lower slippages, Q of YQ, better early stage. Indicators and improve NPAs following the LRC sale. In terms of areas we are sharpening further. CASA growth remains soft industry wide, but we are intensifying our efforts to strengthen. Customer engagement and enhance product propositions. Operating expenses remain well managed and broadly in line with our guidance despite certain. Regulatory driven one offs and while slippages have improved, we continue to remain focused. On further strengthening recoveries, reducing incremental stress. And moving steadily towards our medium term credit cost aspirations. Overall, the quarter demonstrates improving fundamentals and continued balance sheet resilience. While my colleague and CFO Mr. Rajiv Mantri will provide a comprehensive overview of the financials, I would like to take this opportunity to highlight a few performance INDICATORS from the 3rd quarter of FY26 as on 31st December 2025 our gross advances stood at about 1.45 lakh crore reflecting healthy growth of 10% YoY. On the liability side deposits reached rupees 1.57 lakh crore growing faster than advances on Y on Y basis, a reflection of of our strategic focus on maintaining a balanced and sustainable franchise. Retail term deposits continued their strong momentum growing by over 36% YoY, underscoring the.
Increasing trust of our customers and the. Strength of branch network. CASA now stands at 27% of total. Deposits and the overall retail mix including. CASA and retail term deposits improved further to 72% signaling continued strengthening of deposit. Granularity and stability aligned with our diversification agenda. Our secured book at 57% of overall advances continue to gain share within the overall portfolio supported by steady growth across secured products. This shift reinforces the improving risk profile and balance within our advances mix. Our NIM for the quarter at 5.9% remained healthy showing sequential improvement as a benefit of lower cost of funds flowed through for the nine month period as well. Means remained largely stable at 6%. Credit costs showed a small improvement sequentially and we remain committed to bringing them down further through this year. Gross and net NPA ratios improved significantly at 3.3% and 1 percentage respectively while our PCR including technical write offs improved to 84.3%.
For Q3 financial year 26, our net total income stood at Rs 3379 crore while operating profit was rupees14.45 crore. The bank reported a PAT of rupees 206 crore for the quarter. This is almost 89% higher than than what we had reported for the Q2. FY26 ending September For 9 months financial. Year 26, ROA and ROE stood at 0.5% and 4 percentage respectively. Our capital position remains robust including 9 months FY26 profit. The capital adequacy ratio stands at 17.8% and Tire One Capital at 17% providing ample headroom to support future growth. We also continue to expand our distribution footprint taking the branch network to 1831 branches with 20 new branches added during the quarter and conversion of 57 housing finance centers into full fledged banking branches. These expansion enhances our reach and strengthens our ability to serve customers more efficiently. To conclude, this has been a quarter of steady progress and strengthening fundamentals for Bandhan Bank.
We continue to execute with discipline across our strategic priorities. Driving quality growth, deepening our retail franchising, enhancing our digital capabilities and reinforcing our. Risk and control frameworks. While there is more work ahead, the trajectory is encouraging and we remain fully committed to to building a stronger, more resilient and more diversified bank. I would like to thank our customers, employees, shareholders and all stakeholders for their continued trust and support. Thank you.
operator
Sir. Should we open the floor for questions?
Partha Sengupta — Managing Director and Chief Executive Officer
Yeah. With this I would just like to invite our Chief Financial Officer Mr. Rajiv Mantri to take you through the detailed financial performance of the quarter.
Rajiv mantri — CFO
Thank you, Mr. Sengupta. And welcome again everyone to the earnings call. We’ll now move on to the business performance for the quarter. I’ll walk you through the financial highlights and provide an overview of how we have performed. Let me first start with the advances where the trends for this quarter reaffirm the progress we are making in reshaping the balance sheet. As of 31st December 25th, the gross advances stood at Rupees 1.45 lakh crore representing 10% year on year growth. And on sequential basis the growth was healthy at about 4%. Importantly, if we adjust for the NPA sale of rupees 3165 crores during the quarter underlying advances, growth would have been higher at 12% year on year and 6% quarter on quarter indicating sustained business momentum.
Beneath the reported numbers, the EEB book, which is our microfinance portfolio stood at R50076 crores showing a 11% year on year and 3% sequential decline. However, when we normalize for the NPSL to arc of rupees.