Bandhan Bank Q4 FY26: PAT up 68%, NIM at 6.2%

Bandhan Bank Ltd (NSE: BANDHANBNK) used its Q4 FY26 earnings call on April 28, 2026 to outline a quarter of sequential improvement across margins, collections and asset quality, alongside steady loan and deposit growth. Management described FY26 as “important and challenging”, but said the March quarter showed strengthening fundamentals in core businesses.

The bank ended FY26 with gross advances of about ₹154,000 crore, up 13% year on year, and deposits of ₹166,000 crore, up 10% year on year. In Q4 FY26, net interest margin expanded to 6.2% from 5.9% in Q3, supported by lower funding costs and improved yields. The quarter also saw a reduction in bank-level slippages and an improvement in collection efficiency, particularly within the EEB book.

What management highlighted from the quarter

Management said the quarter reflected better momentum in the EV segment, continued traction in secured lending, and progress in improving deposit quality. CASA growth was described as strong, and the bank said it consciously reduced the share of high-cost bulk deposits to improve granularity.

On profitability, management linked the improvement to a sustained reduction in cost of funds and a pickup in fee income, including processing fees and third-party distribution income. Asset quality trends were termed “constructive”, with sequential decline in slippages and improvement in SMA buckets.

The bank also pointed to elevated operating expenses in Q4 due to non-recurring items, while reiterating a focus on cost discipline and operating leverage.

Loan book growth and portfolio mix

As of March 31, 2026, Bandhan Bank’s loan book stood at ₹154,000 crore, registering 13% year-on-year growth and 6% sequential growth. The bank said growth was supported by momentum across major businesses.

The EEB portfolio was ₹53,906 crore. Management said it remained lower on a year-on-year comparison, which it described as an industry-wide phenomenon, but it delivered 8% sequential growth in the quarter.

Non-EEB segments grew 25% year on year and were described as close to two-thirds of total advances. Within this, retail assets grew 46% year on year, driven largely by secured products such as commercial vehicles, construction equipment, auto loans and gold loans. Wholesale banking grew 33% year on year, supported by deeper client engagement and execution.

Deposits: focus on CASA and retail granularity

Total deposits were ₹166,000 crore as of March 31, 2026, reflecting 10% year-on-year growth and 6% sequential growth. Management said the deposit expansion broadly tracked the growth in advances.

The bank said it made progress in improving the quality and granularity of deposits, with strong CASA growth during the quarter and continued traction in retail deposits. It also stated that the share of high-cost bulk deposits was reduced, supporting lower funding costs.

Collections, slippages and asset quality indicators

Bandhan Bank reported improved collections in Q4 FY26. Overall collection efficiency excluding NPA improved to 98.9% in March 2026 from 98.1% in December 2025.

Within the EEB portfolio, quarter-wide collection efficiency was 99.3% versus 98.2% in Q3 FY26. For March specifically, EEB collections were 98.6% versus 98.0% in December.

On slippages, the bank said gross slippages at the bank level declined to ₹1,028 crore in Q4 from ₹13.14 crore in the previous quarter (as stated during the call). It added that the moderation was largely driven by the EV segment, where slippages reduced to ₹690 crore from ₹942 crore in Q3 FY26.

For Q4 FY26, gross NPA and net NPA were 3.3% and 1.0% respectively, with provision coverage at 85% including technical write-offs.

Q4 profitability: NII, margins and PAT

Net interest income (NII) for Q4 FY26 was ₹2,796 crore, up 1.4% year on year and up 4% sequentially. Net interest margin improved to 6.2% from 5.9% in Q3.

Management attributed the margin expansion to a 23 basis point quarter-on-quarter reduction in deposit costs and a 14 basis point improvement in advance yields. It also linked the 30 basis point NIM increase to lower slippages, which reduced interest reversals.

Other income grew 10% year on year and 12% quarter on quarter, with third-party products distribution income up 34% year on year.

Net total income in Q4 FY26 was ₹3,566 crore and operating profit was ₹1,441 crore. Profit after tax (PAT) was ₹534 crore, up 68% year on year and up 159% sequentially.

Full-year FY26 snapshot shared on the call

For FY26, the bank reported NII of ₹10,830 crore, a decline of 5.8% year on year, which it attributed to moderation in NIM from secured book expansion and the impact of a repo rate cut.

Operating profit for FY26 was ₹5,855 crore. Management also shared FY26 NIM of 6.1%, opex-to-assets of 4%, and credit cost of 3%. It said higher credit costs reflected industry-wide pressure in the EV book.

Net profit for the full year FY26 was stated as ₹12.24 crore on the call, with annualised ROA of 0.6% and ROE of 5%.

Dividend recommendation

The Board of Directors recommended a dividend of ₹1.50 per share, subject to shareholder approval at the forthcoming annual general meeting.

Key numbers table

Market impact: what changed quarter-on-quarter

The biggest moving pieces in the quarter were margins and credit trends. NIM rose to 6.2% as deposit costs fell and loan yields improved, and management also pointed to lower interest reversals linked to reduced slippages.

On credit, better collections and improving SMA trends were positioned as evidence of stabilising portfolio behaviour. The decline in EV-segment slippages was highlighted as a key factor behind the moderation in overall slippages.

On the balance sheet, the bank’s messaging emphasised continued diversification through the non-EEB book and secured products, while also strengthening liabilities through CASA and retail deposit traction.

Management commentary and near-term expectations

In the Q&A section, management attributed the improvement in ROA to lower deposit costs, higher other income, and reduced credit costs, partially offset by higher expenses.

On margins, management reiterated its expectation that cost of funds would continue to improve through Q4, Q1 and Q2, and said term deposit repricing had supported the sequential NIM improvement from 5.9% to 6.2%. It added that further term deposit renewals could support an additional 10 to 20 basis points of margin improvement over the next two to three quarters.

Conclusion

Bandhan Bank’s Q4 FY26 call centred on sequential improvement in profitability, stronger margins and a better credit trajectory, alongside double-digit loan and deposit growth. Near-term focus areas highlighted by management include granular deposit growth, tighter cost discipline, and continued recovery efforts. The next key milestone for investors is the shareholder decision on the ₹1.50 per share dividend at the forthcoming AGM.