01 — At a Glance
The Microfinance Bank That Had a Very Rough Year and Is Now Selling the Evidence
- 52-Week High / Low₹192 / ₹134
- Q3 FY26 Revenue₹5,431 Cr
- Q3 FY26 PAT₹206 Cr
- Q3 FY26 EPS₹1.28
- Annualised EPS (9M avg × 4)₹5.72
- Book Value₹153
- Price to Book1.20x
- GNPA (Dec 2025)3.33%
- NNPA (Dec 2025)0.99%
- Capital Adequacy (CAR)17.8%
Auditor’s Opening Note: Bandhan Bank reported Q3 FY26 PAT of ₹206 Cr — down 51.8% YoY, because Q3 FY25 had a ₹426 Cr PAT that included one-time CGFMU guarantee claims. The real story: they sold ₹3,165 Cr of NPAs and ₹3,707 Cr of written-off loans to ARCs in the same quarter, absorbing ₹120 Cr in gratuity provisions from new labour codes, and still delivered a PCR of 84.3% including technical write-offs. The stock is up 32.1% in 3 months. Either the market sees the recovery. Or it’s optimistic as always. Probably both.
02 — Introduction
The Bank That Began as a NGO and Is Now Having a Very Public Mid-Life Crisis
Let’s set the stage. Bandhan Bank didn’t start as a glossy private bank with marble lobbies and tie-wearing relationship managers. It began in 2001 as a small microfinance NGO in West Bengal, serving women who had literally never held a bank account. By 2015, it had a banking licence, ₹12,089 crore in deposits, and what appeared to be the most heartwarming origin story in Indian finance.
Then reality happened. A pandemic. Floods in Assam. Political unrest in West Bengal. Manipur disruptions. Borrower overleveraging across the microfinance sector. Cumulative write-offs of ₹15,207 crore between FY21 and FY24. GNPA touching 7.32% in September 2023. The kind of asset quality journey that would make your credit analyst break into hives.
But here’s where it gets interesting. In Q3 FY26 (December 2025), the bank sold ₹6,872 crore of ugly loans (NPAs + written-off pool) to ARCs, reported GNPA at 3.33% — the lowest since the pandemic — and announced that the de-growth phase in their microfinance book is “behind them.” Management walked into the concall with the confidence of someone who just spring-cleaned their entire apartment and wants you to notice.
Is the worst over? The data says maybe. The 9-month RoA of 0.5% says it’s still a recovery story, not a celebration. And ₹2,310 crore of 0–90 DPD stress in EEB says the janitor hasn’t finished mopping yet. Let’s look under the hood.
Concall Note (Jan 2026): “The de-growth phase in the EEB book is behind us and the portfolio is stabilising.” — Bandhan Bank Management. Filed next to “we’ve turned the corner” in the hall of famous last words. To be fair, the numbers actually suggest they might be right this time.
03 — Business Model: WTF Do They Even Do?
They Lend to People the Other Banks Refuse to Meet
The business model has two souls fighting inside one balance sheet. Soul One is the original Bandhan — lending to women in rural West Bengal and Assam through group-based microfinance (called EEB: Emerging Entrepreneurs Business). These are ₹30,000–₹1 lakh loans to vegetable vendors, tailors, and small traders, collected weekly by field officers on motorcycles in areas where the nearest ATM is a rumour.
Soul Two is the ambition — Bandhan Bank wanting to be a full-service bank. Housing loans (24.2% of advances), wholesale banking (26.5%), retail products, gold loans, CV finance, MSME. The 2019 acquisition of GRUH Finance was supposed to anchor this diversification. GRUH brought mortgages; Bandhan brought chaos. The integration is still being untangled.
As of December 2025, the secured book is 57% of advances — up from 33% in FY21. EEB group loans are now 22% of the book, down from 33% a year ago. The transformation is real. But the legacy stress from old microfinance vintages is also very real, as anyone who has tracked slippage data for the last 12 quarters can confirm.
EEB Group22%Of advances
Housing23%Of advances
Wholesale31%Of advances
Secured Mix57%Of advances
The thing about microfinance is that it works brilliantly — until it doesn’t. When it works, repayment rates exceed 99% and returns are extraordinary. When it doesn’t (elections, floods, political agitations, or a pandemic), 40% of your book blows up simultaneously because your borrowers all live in the same geography and got the same bad advice from the same local politicians. Bandhan learned this. Several times.
💬 Do you think Bandhan’s shift to secured lending is the right strategy, or are they losing the one thing that made them special? Drop your view below!
04 — Financials Overview
Q3 FY26: The Quarter Where Cleaning Costs More Than The Business Earns
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