Shares of Bandhan Bank are drawing investor attention today following two significant developments: the appointment of Vinay Jain as interim Chief Financial Officer and a reaffirmation of the bank's ratings by ICRA. These factors collectively highlight the private lender's ongoing efforts to strengthen its financial position and operational leadership.
ICRA Reaffirms Ratings Amid Strengthening Fundamentals
Credit rating agency ICRA has reaffirmed its ratings for Bandhan Bank's non-convertible debentures and certificates of deposit. The agency cited expectations that the bank will maintain healthy capital cushions, a steady liability profile, and demonstrate improving asset quality alongside steady profitability. Key factors influencing this positive assessment include:
- Strong Capitalisation: As of June 30, 2026, the bank reported a Tier I capital ratio of 17.54% and a Capital-to-Risk Weighted Assets Ratio (CRAR) of 18.22%.
- Improved Portfolio Mix: The share of the secured portfolio increased to 57% of total advances by June 30, 2026, up from 52% a year prior, indicating a strengthening asset base.
- Enhanced Deposit Granularity: The proportion of current account savings account (CASA) and retail deposits grew to 74% of total deposits by June 30, 2026, compared to 68% in June 2025.
Asset Quality Shows Improvement, but Vigilance Remains
From an asset quality perspective, Bandhan Bank's headline metrics have shown improvement. Gross Non-Performing Advances (NPAs) declined to 3.15% and net NPAs to 0.93% as of June 30, 2026, down from 4.96% and 1.35% respectively a year earlier. The net stress pool also saw a reduction to 3.1% from 3.8% in the same period.
Despite these improvements, ICRA noted that the bank's share of CASA in total deposits remains below the private sector bank average. Furthermore, while the fresh NPA generation rate has declined, portfolio vulnerability, particularly within its emerging enterprise business (EEB) segment, remains elevated due to the relatively weaker borrower profile. The bank's ability to contain future slippages will be a key monitorable.
Profitability and Operational Efficiency
While advances have seen healthy growth, driven by the non-EEB book, the bank's earnings profile continues to be constrained. Higher credit provisions and lower net interest margins (NIMs) have impacted profitability, partly due to a declining share of the high-yielding unsecured book and faster asset repricing in a falling interest rate environment. High operating expenses also contributed to a lower return on assets (RoA) of 0.61% in FY2026, compared to 1.48% in FY2025.
The appointment of Vinay Jain as interim CFO is expected to provide leadership in the bank's financial operations during this period of strategic adjustments and focus on sustained growth.