Bandhan Bank Limited

'Bandhan Bank Limited Q4 FY26 Earnings Conference Call' April 28, 2026

NII for the quarter stood at INR 2,796 crores, reflecting a 1.4% YoY growth and a 4% sequential increase. This was accompanied by strong expansion in margins, with NIMs improving to 6.2% up from 5.9% in Q3. The margin uplift was primarily driven by nearly a 23 basis points QoQ reduction in deposit costs, along with a 14 basis points improvement in advances yields.

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Bandhan

Bank

Years of tte

Turning to other income, performance was encouraging with growth of 10% YoY and sharp 12% increase over the previous quarter. Within this, the third-party products distribution income rose significantly by 34% YoY, reflecting improved branch level penetration and stronger crosssell execution. Processing fee income also rebounded, supported by higher disbursement volumes, especially within the EEB portfolio. Moving to expenses, the operating cost for the quarter came in at INR 2,125 crores, representing a 10% increase sequentially. This was largely attributable to non-recurring items, namely PSLC-related costs and technology expenditures. On a full-year basis, however, operating cost growth remained well-contained at 9% YoY, while the opex to average assets ratio rose to 4.4% for the quarter due to these few non-recurring items. For the full year FY26, the opex to average assets ratio remained within our guided level and was at around 4%. Consequently, operating profit for Q4 stood at INR 1,441 crores. After accounting for provisions and taxes, the net profit for Q4 was INR 534 crores, representing a 68% increase over the same period last year and 159% increase over the previous quarter. Return metrics for the quarter also strengthened, with return on assets for the quarter was at 1.1% and the return on equity was at 9%, reflecting improved operating efficiency underlying profitability. Briefly turning to the full-year performance , NII for FY26 stood at INR 10,830 crores, decline of 5.8% YoY on account of moderation in NIM led by continued expansion of secured book and impact of the repo rate cut. Operating profit stood at INR 5,855 crores, reflecting resilience in core earnings. NIM, opex to assets and credit cost for FY26 were 6.1%, 4.0% and 3.0%, respectively. Higher credit cost was on account of pressure on the EEB book - an industry-wide phenomenon, that we saw play out during the year. Net profit for the full year FY26 was INR 1,224 crores, resulting in an annualized ROA of 0.6% and ROE of 5%. To summarize, the quarter reflects steady progress across growth, asset quality, margins and balance sheet resilience. Our actions over the past few quarters are translating into a more stable portfolio, improving profitability, while staying disciplined on risk and cost. We remain focused on sustainable growth, strengthening the liability franchise and further improving the return metrics. With that, I'll now hand it back to the moderator, and we'll be happy to take your questions. Moderator: Thank you. Ladies and gentlemen, we will now begin the question-and-answer session. We take the first question from the line of Piran Engineer from CLSA. Please go ahead. Piran Engineer: Yes. Hi, good evening. So just first question is what led to the strong average CA growth this quarter?

'Bandhan Bank Limited Q4 FY26 Earnings Conference Call' April 28, 2026

The flow impact is still being computed. We don't have a number as of yet. As that gets computed, we'll have to assess the new circular implications and then we'll be able to come back to what the flow impact should be. But as of now, this is the range of impact based on the transition that I can share with you. Jayant Kharote: Is there more to add on the standard asset provisioning? Partha Pratim Sengupta: Standard asset provisioning. Rajeev Mantri: Yes. On the standard asset provision, we basically, on the unsecured portfolio, which is, let's say, micro finance, which is the largest one. Partha Pratim Sengupta: So correctly, we are having around INR 1,072 crores provisions on all the standard assets. So that entails actually that includes 2 additional provisions. One is that upon the standard assets, we take an additional 0.75%. And also, we have got an additional provision of around INR 136 crores. So with this, I think INR 1,072 provisions are already there in our books. So, our impact on the ECL going forward, the flowed is 5% in most of the cases, expecting some where the flowed is a little bit less. But since we are already continuing to make 1% additional provision on the standard assets, which is 75 basis points higher than what is now required as per direct norms for the day. So, in fact, might be that will be 4% on the March value for the day. But I think that going forward, the way we are managing our assets if we can manage our SMA-1 and SMA-2 books much more prudently, this requirement will not have that much of effect on our credit cost. Rajeev Mantri: And I think if I can translate these 2 percentages, for EEB, the requirement is 0.25%. We maintained 1%, which is 75 basis points higher, like Partha sir, mentioned. On personal loans and on ABG, it's around 0.4%, in line with the added requirements. Jayant Kharote: So just to rehash everything, EEB, you're already maintaining 1%, non-EEB unsecured is the only portion where you have to go from 40 bps to 1%? Rajeev Mantri: That's correct. That's right. Jayant Kharote: Great. Thank you sir and congrats once again. Rajeev Mantri: Thank you. Moderator: Thank you. We take the next question from the line of Ankit Bihani from Nomura. Please go ahead. Ankit Bihani: Hi thank you for the opportunity. I wanted to know that what proportion of your deposits would be government related? And the second question is, how should one think of margin trajectory from here on?

'Bandhan Bank Limited Q4 FY26 Earnings Conference Call' April 28, 2026

Bandhan

Bank

Years of

Rajeev Mantri: So, we have improved the process that we have for microfinance loans for EEB segment and the percentage of EEB loans for PSL has been improving steadily, which will also help us going forward. Piran Engineer: Okay. But then, Rajeev, what sort of EEB loans today do not classify for PSL and going forward, they will classify, like what is the change, if you can? Partha Pratim Sengupta: No. Again, I'm telling you that it is more of a revamping of a process. So currently, what was there the agriculture of the allied agriculture loans that we're giving it are not getting captured into our system. So, we have made that available and I can tell you that currently, a year ago, it was only 10% or 15% of the EEBs, which was coming under the PSL, qualifying for PSL. Now it has already increased to 40%. Going forward, it will increase to 60%, 65%. So, the revamping has already been done. And you see for the RBI also in the circular clearly mandates that banks have to follow a certain process and procedures to get them qualified. So those steps have been taken, and we are now already seeing the green shoots. As I told you that almost 40% now have been covered on the EEB segment. So going forward, this percentage would increase. And apart from that, we are also focusing on the agriculture loans. That is a direct to agriculture which will have the PSL effect. Piran Engineer: Understood. And sir, my next question is about the vehicle business. Vehicle finance now with the book is INR 5,000 - INR 6,000 crores. It's a decent size. Can you talk a bit about it? How much -- firstly, who is our typical customer who comes to us? Secondly, how much of the crosssell happens to own deposit customers versus open market and is this entirely car loans or is it 2wheelers EV, etcetera, also? Partha Pratim Sengupta: Yes. So Hirak will be answering, he's our Retail Head. Hirak Joshi: So, this is to answer your first question, the vehicle loans include 2-wheeler as well as car loans and the customer segment is salaried and self-employed mix, but majorly it is salaried segment. When it comes to other vehicle finance which we talked about is commercial vehicle and construction equipment, where our major focus currently is on a strategic and super strategic customer and some portions say about 9% - 10% of our customers in the CV/CE are retail who are holding the fleet of less than 10 vehicles. And about the cross-selling, so currently about almost 20% of our volume comes from our own customers, which we call it in an existing branch customer. Piran Engineer: Okay. Sir, just broadly, what is the mix of loans between CV, PV, 2-wheelers? Hirak Joshi: Okay. So, about INR 3,000 crores is commercial vehicles, about INR 1,700 crores is construction equipment, about INR 1,800 crores is car loans and about INR 900 crores are 2-wheelers loans. Piran Engineer: Okay. This is perfect. That's it from my end. Thanks and wish you all the best.

'Bandhan Bank Limited Q4 FY26 Earnings Conference Call' April 28, 2026

Bandhan

Bank

Years of

Bandhan

Bank

Years of

The second part is that so 56% to 58% will not have much impact on the NIM. Let me tell you that we are keeping our trajectory or the aim that our EEB will continue to be one-third of our total portfolio. In both ways, the unsecured book, the EEB book will also grow and the secured books will also grow. The question as the NIM, as for the NIM is concerned for the day, the EEB book, the main major problem of the EEB book if you look in the past year was the delinquency level or the NPA level and because that where the interest reversals took place and where the NIM was largely affected. If we can continue even with this 35% share and maintain the present, I would say, the NPA level or the SMA book and the delinquency level and if we continue to improve it further, it will not have any much impact on the NIM as for the day. So again, if there is any shortfall, let me again tell you about our direction for the day that we are now focusing on the other income of the secured book. So if in there is any shortfall in the NIM on account of the growth of the secured book, it will get compensated on the other income. So overall NIM plus other income what we have projected is around 6.0% and 1.5% on assets. I think 6% and 1.5%, so total of 7.5% on assets. So that will remain intact, that is our aim. So if somewhere if we say that if we have come out at 5.9% or 5.8% on our NIM on assets, so the other income will also go by 20-30 basis point more in that segment. So overall that trajectory of 7.5%, we will try our best to maintain it. Dev: Okay. And for going forward, say within 5 years, do you continue to stick with that proportion of 58%, 42% or there would be something I mean long-term any goal or target that you are continuously pursuing to achieve 42 to what? Partha Pratim Sengupta: Currently that ratio remains. It is again the experience that we will see, we will have to strategize or we have to change our strategy at that point of time. The reason for going to secular growth as we have told that there were two-three reasons. The first one was that we were too much on the unsecured books and we are a universal bank. The depositors' confidence is very important. So that's why a secular growth in all the advances comprising secured and unsecured books is necessary. This is the first thing why we have shifted. Number two, because now my portfolio is also becoming much, much stronger than what we had been a year or two years before for the day. This is one thing. So currently, definitely, we have not thought, but again, it will all depend on our experience. So, we hope that things like Corona or other things will not happen or even this war would also end, there will not any impact. So it will depend -- it will completely depend on the experience that we gather going forward.

And lastly, Vishal, since you are there on the call, if you can talk about your resignation. I thought everything is going on very well. I mean, you have reached almost turnaround or almost normalized level of slippages, so what happened? Thank you. Vishal Wadhwa: I'll take you offline on this one. There is nothing, it's a personal career advancement, nothing beyond. Yes. Partha Pratim Sengupta: So, bank is now I would say much, much more process-driven rather than person-driven. I would say that we should look at it for the day. We have brought many changes in the EEB, rather we have transformed the model of the EEB business and lot of technology and other inputs have been made and Vishal has implemented it very meticulously. It is his personal career growth he has aspired for and we wish him all the best. Jai Mundhra: Sure, sir. Sorry sir, if I can ask one more question. There was a media reports on some activity going at promoter level. Is there any -- anything that you can add?