Are Bandhan Bank Ltd. latest results good or bad?

Bandhan Bank Ltd.'s latest financial results for Q3 FY26 present a complex picture of operational performance. The bank reported a net profit of ₹205.59 crores, reflecting an 83.78% sequential recovery from the previous quarter, although this figure represents a 51.79% decline compared to the same period last year. This suggests that while there is a bounce-back from a weak prior quarter, the overall profitability remains under pressure on a year-over-year basis.
The bank's interest earned showed a modest sequential growth of 1.45%, but it remained nearly flat year-on-year with a slight decline of 0.87%. Similarly, net interest income increased by 3.85% compared to the previous quarter, yet it declined 4.48% year-on-year, indicating challenges in maintaining income levels amidst rising funding costs and competitive pressures.

A notable positive trend is the improvement in asset quality, with the gross non-performing asset (NPA) ratio declining to 3.33% from 5.02% in the previous quarter, marking the lowest level in several quarters. This improvement suggests effective recovery efforts and enhanced collection efficiencies. The net NPA ratio also improved to 0.99%, indicating stronger provision coverage.

However, the bank's return on equity (ROE) remains low at 5.00%, which is below the average for its peers, raising concerns about capital efficiency. The net interest margin (NIM) of 5.9% shows a slight sequential improvement but is significantly lower than the previous year's figure of 6.9%, reflecting ongoing pressures on profitability.

The CASA (current account savings account) ratio has also declined to 27.3%, indicating a shift towards more expensive term deposits, which could further impact margins. Overall, while there are signs of recovery in certain areas, Bandhan Bank continues to face structural challenges that may hinder its ability to generate sustainable profitability.

In light of these results, the company saw an adjustment in its evaluation, reflecting the ongoing complexities in its operational landscape. The coming quarters will be critical for Bandhan Bank as it seeks to stabilize its financial performance and address the underlying challenges affecting its profitability and growth trajectory.