BANDHANBNK Q2 FY27 Earnings Call: PAT Jumps 5.5x YoY, Maintains 14% Loan Growth Guidance

BANDHANBNK held its Q2 FY27 earnings call on October 28, 2026. Here's a quick read of what management said — performance, strategy, and the outlook ahead.

Sharp profitability recovery, driven by diversification

• PAT of Rs.622 crore — up 23.9% QoQ and ~5.5x YoY in Q2 FY 2026-2027; ROA improved to 1.2% (from 1.0% in Q1 FY 2026-2027) and ROE to 9.3% (from 7.7%). Context: Q1 FY 2026-2027 PAT was just Rs.112 crore at 0.20% ROA.
• Net total income of Rs.3,665 crore (+17% YoY) — NII of Rs.2,960 crore (+14.54% YoY, +1.4% QoQ); operating profit Rs.1,556 crore (+18.8% YoY, +14.6% QoQ). H1 FY 2026-2027 net profit was Rs.1,123 crore (+132% YoY) at 1.1% annualized ROA.
• NIM broadly stable at 6.1% — vs 6.2% in Q1 FY 2026-2027, despite asset-mix shift toward secured businesses; opex Rs.2,109 crore (+15.4% YoY); credit cost stable sequentially at 1.8%.
• Advances ~Rs.1.5 lakh crore gross (Rs.1.58 lakh crore as of Sep 30, 2026) — up 13.1% YoY and 1.8% QoQ; non-EEB book grew 19.8% YoY to 66.7% of advances; EEB portfolio at Rs.52,616 crore, up 1.7% YoY and broadly stable QoQ.
• Capital adequacy at 18.3% (Tier-I 17.7%) — network expanded by 13 branches and 14 banking units in Q2 FY 2026-2027, taking totals to 2,001 branches and 4,414 banking units.
• Credit cards launched in Q2 FY 2026-2027 — four variants (PAT, Ignite, Flair, Lumina) spanning Gen Z/emerging affluent to premium lifestyle, positioned as a relationship-deepening and cross-sell lever.

Deposit growth lags loans; savings miss a watch item

• Deposits ~Rs.1.73 lakh crore, up 4.7% QoQ / 9.2% YoY — without any FCNR(B) support; net CD ratio improved to 89.5% from ~92% in Q1 FY 2026-2027. Management admitted ~10% YoY deposit growth must improve, noting peers had SNRB leverage advantages Bandhan Bank did not have.
• Savings balances moved out in Q2 FY 2026-2027 — after recalibration of interest rates on certain savings deposits, performance below management's expectations; the rebuild plan (corporate salary accounts, HNI/ultra-HNI propositions, granular acquisition, cross-sell, digital) is a medium-term approach.
• CASA ratio declined QoQ (analyst cited ~75bps) to 26.7% — attributed to Annapurna scheme flows (~Rs.4,000 crore/month, Bandhan is the scheme's banker in West Bengal) draining mid-quarter due to puja timing; current accounts grew 36.9% YoY.
• Retail deposit mix up ~6 pts to ~73% — from ~67-68% in Q2 FY 2025-2026; retail term deposits grew ~17% YoY; management will no longer rely on interest rates as its USP, shifting emphasis to customer satisfaction and process speed.
• Bulk deposits rose ~Rs.4,300 crore (~10%) QoQ — while borrowings fell ~Rs.3,400 crore (~25%) QoQ as high-cost borrowings were substituted; management stated bulk funding will not be used structurally to drive loan growth.
• Nine states sent appreciation letters — for the bank's work in curbing cyber fraud, which management believes will boost depositor confidence and aid deposit growth.

EEB pool improving; slippages elevated but contained

• GNPA 3.1%, NNPA 0.9% — PCR stable at 71.2% (74.3% including provisions against SRs); provision coverage including technical write-offs ~87%; collection efficiency (excl. NPA) at 99.4%, up 36 bps QoQ.
• EEB DPD pool down ~17% QoQ to Rs.1,529 crore — from Rs.1,842 crore; pool at 2.9% vs 3.5% in Q1 FY 2026-2027; EEB collection efficiency improved to 99.3% from 98.9%.
• Gross slippages of Rs.1,125 crore (vs Rs.1,079 crore in Q1 FY 2026-2027) — of which EEB Rs.655 crore; recoveries/upgrades Rs.481 crore; net slippages improved ~14% QoQ after normalizing the Rs.119 crore ARC recovery recorded in Q1 FY 2026-2027; write-offs ~Rs.607 crore, including Rs.424 crore from the EV portfolio.
• Assam floods: Rs.406 crore of loans under moratorium — across 4 affected districts per SLBC guidelines, with an additional 5% provision taken in Q2 FY 2026-2027; more than 96% of the moratorium book is standard, with 99.1% collection efficiency immediately after the moratorium.
• Drought exposure contained — Karnataka is ~1% of the EB book (120 affected clusters <0.5%); drought-impacted exposure equals 2.6% of the total book; Andhra Pradesh has no major impact; no material impact anticipated for FY 2026-2027.
• Vintage curves plateau after ~18 months — recent vintages show a much lower gradient with significantly lower MOB-wise slippages than the older Q1 25/Q2 25 vintages.

33/33/33 balance taking hold; home loans the laggard

• Book now at 33% EV, 33% wholesale, 33% retail and housing — as of Q2 FY 2026-2027; the strategic decision (made when the CEO joined) to reduce EV dependence has been executed, with wholesale banking (+31.6% YoY) compensating for the lower EV share.
• Retail assets grew 41.9% YoY — commercial vehicles, construction equipment, auto and gold loans; secured advances grew 18% YoY to 57.3% of total advances (from 54.9% in Q2 FY 2025-2026).
• Home loans lagged; MD conceded the segment "should have done much better" — attributed to integrating Geofinance (an NBFC) into a bank framework; remedial changes (branch conversion, segregation of onboarding/underwriting/operations) began October 2025 (FY 2025-2026) and completed by April-May 2026 (Q1 FY 2026-2027).
• Home loan recovery expected from Q4 FY 2026-2027 — business impact continues through Q3 FY 2026-2027 ("probably one more quarter") before growth resumes.
• Retail (launched ~2 years ago) not yet ROA-positive — negative ROA narrowing quarter by quarter; management expects to push retail into positive territory over the next 2-3 quarters (around Q4 FY 2026-2027 to Q1 FY 2027-2028). Analyst Nitin Agarwal noted several retail products remain subscale at ~Rs.2,000–3,000 crore book size as of Q2 FY 2026-2027.
• Wholesale/EB book ROA strong and improving — CEO said it "has always been good" and is largely driving overall bank ROA improvement; fee-based income focus (new products being launched) expected to lift segment ROA further.

Fee momentum strong; ECL and bancassurance draft norms are key overhangs

• Processing fee income +30% YoY; third-party distribution +26% YoY — driven by disbursements (business up 30% YoY in Q2 FY 2026-2027) plus a 25 bps increase in EB-segment processing charges effected in February 2026 (Q4 FY 2025-2026); treasury income up 39% QoQ; management affirmed a similar fee run-rate for H2 FY 2026-2027.
• No one-time income in Q2 FY 2026-2027 — CEO and CFO confirmed the jump in other interest income contains no interest on IT refund and no extraordinary or one-time income anywhere in the income portfolio.
• ECL day-one transition impact estimated at ~Rs.2,200 crore — computed on March 2026 (FY 2025-2026) flow rates, to be absorbed through capital with no P&L impact; RBI has provided a five-year window to amortize it, with flow-through impact estimated at 15-20bps per quarter (period unspecified); management expects a "significantly better" outcome given improving pools (earlier guidance: Rs.1,250 crore, updated to ~Rs.2,000 crore, period unspecified; EIR excluded with minimal impact expected).
• Draft commission-cap regulations to create headwinds for all banks — management said Bandhan cannot be insulated but views its model as relatively well positioned (predominantly retail insurance sales in semi-urban/rural areas where commission rates are proposed to be at least ~20% higher); feedback submitted to the regulator that the cost of insurance distribution should be compensated. CFO said no detailed product-mix/commission study has yet been done in response to peers flagging a potential ~60% hit to bancassurance income (period unspecified).
• PSLC cost trajectory reaffirmed — after Rs.240 crore in FY 2025-2026 (analyst-cited), FY 2026-2027 cost guided at Rs.120 crore full-year (~Rs.31 crore per quarter), FY 2027-2028 cost to be "almost neutralized / almost zero", turning positive thereafter.
• Employee expense growth ~20% in Q2 FY 2026-2027 — driven primarily by the newly implemented wages act (applicable to most EV segment employees), expected to continue through FY 2026-2027; CFO said employee costs should remain at current levels at least till Q4 FY 2026-2027; headcount stable (CEO cited 25,000) with focus on productivity per employee.

FY27 guidance framework intact; MFI re-acceleration targeted

• FY 2026-2027 loan growth target maintained at ~14% — as set at the beginning of the year; the analyst noted this implies ~6%+ growth per quarter over Q3-Q4 FY 2026-2027 and flagged NIM pressure risk if deposit growth does not keep pace; management targets deposit growth slightly higher than loan growth every quarter in FY 2026-2027.
• FY 2026-2027 NIM guidance of 6.1-6.2% maintained — cost of funds expected to keep moderating with no deposit-rate increases anticipated in the very short term; Q3 FY 2026-2027 NIM expected largely unimpacted by repo cuts (existing-loan resets effective 1st January), with Q4 FY 2026-2027 seeing a positive impact dependent on deposit cost trends; ~50% of the FY 2026-2027 loan book is fixed-rate and unimpacted.
• FY 2026-2027 ROA waterfall detailed — NIM ~6.1-6.2% contributing ~5.8% to ROA, other income ~1.5% (net total income 7.3%), opex 4.2% (operating profit ROA ~3.1%), credit cost possibly improving from 1.8% to 1.7% (provisions ROA ~1.2%), PBT ROA ~1.9% and PAT ROA 1.4% — guidance range of 1.2-1.4% PAT ROA, with the 1.2% lower end already achieved.
• Q4 FY 2026-2027 exit ROE guidance of 1.2-1.4% reiterated — CEO said there is "no change" to guidance commentary despite the 49% repo-linked loan book; the 1.6-1.8% medium-term ROA aspiration (reiterated by IR) still holds, with only the timing unresolved (no specific period given).
• MFI growth of 8-10% targeted in Q3-Q4 FY 2026-2027 — book decline arrested in Q2 (flat QoQ while peers returned to growth), with slippages, GNPA/NNPA and recovery rates improving and disbursements tracking in line; portfolio yield at 21.69%, origination rates at 23.5-23.9% with no plan to increase MFI rates as of now.
• Maharashtra exposure limited to 2.6% of the EV portfolio (Rs.52,000 crore) — not the total loan book, as of Q2 FY 2026-2027; no worrisome borrower reactions observed so far under the September-October (Q3 FY 2026-2027) Fair Practice Code directives, which the bank already follows; management sees no major disruption as of now.
• H2 FY 2026-2027 priorities — accelerating granular deposit growth, rebuilding SB momentum, disciplined growth, asset quality and operating efficiency; EB and housing actions expected to increasingly contribute from Q3 FY 2026-2027, with the external operating environment requiring careful monitoring.