Bandhan Bank Q1 PAT jumps 35% YoY to ₹502 Cr on 40% lower provisions; operating profit slips

Bandhan Bank reported standalone Q1 FY27 (quarter ended June 30, 2026) net profit of ₹501.67 Cr, up 34.9% YoY from ₹371.96 Cr and beating street, which had modelled ~₹460 Cr (+23%). The entire beat is a credit-cost story: provisions (other than tax) fell 40% YoY to ₹682.6 Cr (from ₹1,146.9 Cr) as the microfinance (EEB) book normalised, with GNPA improving to 3.1% (from 5.0% YoY) and Net NPA to 0.9%. Interest earned rose just 2.8% YoY to ₹5,630.55 Cr and net total income was near-flat at ₹3,524 Cr (+1.2%), so the profit growth did not come from the topline. Underneath the headline, operating profit before provisions actually fell 18.6% YoY to ₹1,358.1 Cr, because operating expenses outran income — employee cost rose to ₹1,358.3 Cr (from ₹1,123.6 Cr), including a one-off ₹60.83 Cr additional gratuity liability recognised on adoption of the new Labour Codes, and IT operating expenses nearly doubled to ₹156.2 Cr. Adjusting out that ₹60.83 Cr one-off gratuity charge, underlying PAT growth is closer to ~47% YoY. NIM was flat sequentially at 6.2% and NII grew 5.9% YoY to ₹2,921 Cr. Net profit margin (on total income) expanded to 8.05% from 6.00% a year ago, though it eased from 8.62% in Q4 — a QoQ dip that also shows in the 6.1% sequential PAT decline off a strong ₹534 Cr March quarter. Against the Q4 concall guidance, the read is mixed-to-on-track: management's 14-15% credit-growth aim was exceeded (gross advances +16.4% YoY to ₹1.56 lakh Cr, secured loans +27% and now ~57% of the book), and its call for moderating credit costs is clearly playing out. But the guided 10-20 bps near-term NIM improvement has not yet shown — NIM held flat at 6.2%. This is the first result under a leadership transition on the finance side: CFO Rajeev Mantri resigned (last day Sep 25, 2026) and the board approved Vinay Jain as interim CFO from Sep 26. MD & CEO Partha Pratim Sengupta framed the quarter as reflecting "the resilience of Bandhan Bank's franchise"; the numbers support that on asset quality and profit, but not on core operating leverage, which is where next quarter's proof lies.