The post-tax profit of private lender Bandhan Bank decreased to ₹112 crore during the second quarter of the current financial year from ₹937 crore in the year-ago period. Net interest income of the bank stood at ₹2,589 crore compared with ₹2,934 crore in the year-ago period.

Bandhan Bank MD and CEO Partha Pratim Sengupta attributed the less-than-expected performance during Q2FY26 to a combination of transmission of interest rates, higher slippages and subdued growth in microfinance advances.

“The 75-basis-point repo cut in the first quarter was proactively passed on to our customers from the first day of Q2, and that has a short-term impact on the margins.

As the repricing of deposits takes place over the next few quarters, we expect to see the full benefit of lower funding costs, which will help improve margins and support profitability,” Sengupta told analysts at the earnings call of the company.

“Slippages remained elevated, reflecting the ongoing stress in the EEB (microfinance) segment, which was anticipated to be corrected during the quarter, but it seems that it will continue for 1-2 months.

“Growth in the EEB portfolio remains subdued as the full impact of the industry-level guardrails is taking a longer time to materialise than anticipated,” said Sengupta, adding that the growth in advance came largely during the end of the quarter, which made limited contributions to the profit and loss in the second quarter.