Bandhan Bank reported a robust 450% year-on-year surge in Q2 FY27 net profit to INR 622 crore. Performance was driven by a 17% growth in total income and strong operating efficiencies. While the Emerging Entrepreneur Business (EEB) portfolio has stabilized, the bank is aggressively diversifying into non-EEB segments. Investors should watch the bank's progress in its housing finance verticalization and the impact of recent deposit-rate recalibrations on savings growth.
Bandhan Bank Q2 FY27 Profit Soars 450% to INR 622 Crore
Bandhan Bank reported a net profit of INR 622 crore, up 450% year-on-year, alongside a 17% rise in total income to INR 3,655 crore.
Reader Takeaway: Strong profit growth and EEB portfolio stabilization are positive, though housing segment restructuring and deposit volatility remain key challenges.
What just happened
Bandhan Bank delivered a strong quarterly performance for Q2 FY27. Operating profit climbed 19% to INR 1,556 crore. The bank's Return on Assets (ROA) improved to 1.2%, while the Return on Equity (ROE) reached 9.3%. The EEB portfolio, previously a point of concern, stabilized at INR 52,616 crore, marking 1.7% growth.
Why this matters
The bank is successfully diversifying its business mix. Non-EEB loans now represent 66.7% of total advances. This aligns with the target of a balanced portfolio comprising one-third EEB, one-third wholesale, and one-third retail/housing. Management expects this structural shift to lead to more sustainable growth.
What changes now
The bank is undergoing a structural transition in its housing business, which has caused temporary growth disruptions. Management expects the growth trajectory for this segment to improve starting Q4. Additionally, the bank has recalibrated interest rates on savings accounts to shed rate-sensitive balances, aiming for a higher-quality deposit franchise.
Risks to watch
The impact of housing segment restructuring on near-term loan growth remains a significant monitorable. Investors should also watch for the potential impact of proposed RBI regulations on bancassurance commissions. The bank has noted an estimated ECL transition impact of INR 2,200 crore, which will be adjusted over five years.
Context metrics
- Total Deposits: INR 1.73 lakh crore (+9.2% YoY)
- Gross NPA: 3.1%
- Net NPA: 0.9%
- Net Interest Margin (NIM): 6.1%
What to track next
Management has maintained its full-year loan growth guidance of 14% and a Q4 exit ROA target between 1.2% and 1.4%. Success in these targets will determine the bank's momentum in the coming quarters.