Bandhan Bank Ltd Q3 FY26 – ₹206 Cr PAT Collapse, GNPA Down to 3.3%, CASA Slides to 31.4%: A Microfinance Veteran Having an Identity Crisis

1. At a Glance – Blink and You’ll Miss the Volatility

Bandhan Bank is trading at ₹142, down ~16% in the last 3 months, while politely pretending it is a “normal private bank.” Market cap stands at ₹22,947 Cr, price-to-book at 0.93×, and ROE at ~11.9%. On paper, it looks cheap. On the ground, it looks confused.

Q3 FY26 numbers landed like a thud: PAT ₹206 Cr, down ~52% YoY, while Gross NPA improved sharply to 3.3%. Yes, asset quality improved, profits didn’t. CASA ratio slipped again to 31.4%, NIM softened to 7.1%, and the stock market responded by yawning and then selling.

This is a bank that once flexed microfinance muscle, survived demonetisation, Covid, Assam floods, political chaos, and still kept lending. But now, while trying to morph into a “secured retail + housing bank,” it’s stuck between legacy MFI DNA and aspirational private-bank valuation dreams.

Is this a turnaround story loading… or just another mid-cap bank stuck in perpetual rehab? Let’s open the forensic file.

2. Introduction – From MFI King to Mid-Life Banker Crisis

Bandhan Bank’s story began as a microfinance legend. Before becoming a bank in 2015, it was India’s largest NBFC-MFI. It knew the borrower, the village, the self-help group, and probably the borrower’s goat by name.

Then came the banking license. Suddenly, Bandhan had to juggle CASA, CRAR, treasury, corporate loans, compliance, analysts, and Twitter experts—all at once. The transition was not smooth. Asset quality shocks, especially in East and North-East India, kept returning like a seasonal flu.

Fast forward to FY25–FY26: management is consciously de-risking unsecured EEB loans, pushing secured housing, LAP, and retail. Secured book is now 50.5% of advances. Sounds good, right?

But here’s the problem:

• Secured loans grow slower
• CASA is falling
• Cost of funds isn’t collapsing fast enough
• And profits are allergic