Bandhan Bank loans rise 10% as retail deposits strengthen in December quarter

Bandhan Bank said its business performance remained steady in the third quarter ended December 31, 2025, supported by growth in lending and a stronger retail deposit base, even as low-cost deposits showed some moderation.

According to the bank’s regulatory disclosure, total loans and advances stood at ₹1,45,227 crore at the end of the quarter, compared with ₹1,32,019 crore in the same period a year earlier. On a sequential basis, lending rose by about 3.7 per cent from the September quarter, reflecting continued credit demand across segments.

Total deposits increased by 11.1 per cent year on year to ₹1,56,723 crore as of December 31, 2025, up from ₹1,41,002 crore a year earlier. However, deposits declined marginally by 0.9 per cent compared with the September quarter, when they stood at ₹1,58,075 crore, indicating some short-term volatility in funding flows.

The bank said its retail franchise remained a key driver of deposit growth. Retail deposits, including current and savings accounts, rose by 17.2 per cent year on year to ₹1,13,420 crore. This outpaced overall deposit growth and increased the share of retail deposits in the total deposit base to 72.37 per cent, compared with 68.65 per cent a year earlier.

Within the retail segment, term deposits recorded particularly strong growth. Retail term deposits increased by 35.8 per cent year on year to ₹70,690 crore, up from ₹52,063 crore in the corresponding quarter of the previous year. On a sequential basis, these deposits rose by just over 4 per cent, indicating sustained customer preference for fixed-return products amid changing interest rate conditions.

In contrast, the bank’s low-cost current account and savings account deposits declined. CASA balances fell by 4.5 per cent year on year to ₹42,730 crore, down from ₹44,735 crore in December 2024. As a result, the CASA ratio, a key measure of funding cost efficiency, softened to 27.26 per cent, compared with 31.73 per cent a year earlier and 27.97 per cent in the September quarter.

Bulk deposits also declined during the period. These deposits fell by 2 per cent year on year to ₹43,303 crore and by 5.8 per cent compared with the previous quarter. The proportion of bulk deposits in total term deposits dropped to 37.99 per cent from 45.92 per cent a year earlier, reflecting what the bank described as a continued shift towards a more stable, retail-focused funding profile.

On the operational side, Bandhan Bank reported an improvement in collection efficiency, an indicator closely watched for asset quality trends. Pan-bank collection efficiency, excluding non-performing assets, improved to 98.1 per cent in December from 97.8 per cent in September.

The Emerging Entrepreneurs Business segment, which caters to small and micro enterprises, saw its collection efficiency rise to 98.0 per cent from 97.5 per cent over the same period. Non-EEB segments maintained a steady collection efficiency of 98.3 per cent, suggesting consistent repayment behaviour across the loan book.

The bank said its liquidity position remained comfortable. The Liquidity Coverage Ratio stood at about 149.14 per cent as of December 31, well above the regulatory minimum, indicating a strong buffer of high-quality liquid assets to meet short-term obligations.

Bandhan Bank noted that the figures disclosed are provisional and unaudited. The final numbers will be subject to review by the audit committee, the board of directors and the statutory auditors before the formal quarterly results are announced.

Context

The latest update highlights a broader trend among Indian banks of prioritising retail deposits to improve funding stability, even as competition for low-cost CASA deposits remains intense. For Bandhan Bank, maintaining asset quality and rebuilding its deposit mix have been central to investor scrutiny in recent years. The December quarter performance suggests incremental progress on these fronts, though the moderation in CASA growth underscores ongoing challenges in balancing growth with funding costs in a competitive banking environment.