Bandhan Bank Q4 Net Profit Soars 482% to Rs 318 Crore; Declares Rs 1.5 Dividend

Profitability Rebounds Sharply on Low Base, But Sequential Dip Signals Caution

Bandhan Bank posted a sharp recovery in its quarterly performance with a 482% year-on-year jump in net profit to ₹318 crore for the quarter ended March 31, 2025 (Q4FY25), up from just ₹54.6 crore in the corresponding quarter last year. The stellar YoY growth was largely attributed to a low base effect in the previous fiscal year, during which the lender grappled with elevated credit costs and provisioning requirements. However, on a sequential basis, profit declined 25%, raising caution among investors about sustained profitability momentum. The bank’s fourth-quarter performance reflects a mixed operational trend, balancing a sharp profit rise with a softer topline performance.

Highlights:

• Q4FY25 net profit at ₹318 crore, up 482% YoY.

• Sequential profit decline of 25% raises investor caution.

• Strong YoY surge driven by low base from previous year’s weak quarter.

Net Interest Income Slips 4% YoY to ₹2,756 Crore Amid Margin Pressure

Despite the steep jump in net profit, Bandhan Bank’s core income from lending operations showed signs of weakness. The lender’s net interest income (NII) came in at ₹2,756 crore, marking a 4% year-on-year decline. The fall in NII suggests ongoing margin compression and softer interest spreads, particularly in a rising rate environment where deposit costs have continued to increase. For a lender that heavily relies on microfinance lending in eastern and northeastern India, the compression in margins could weigh on future earnings growth, unless offset by stronger fee income or improved loan recoveries.

Highlights:

• NII for Q4FY25 stood at ₹2,756 crore, down 4% YoY.

• Margin compression likely due to rising deposit costs and interest rate headwinds.

• Core lending income weakness a concern for future earnings stability.

Bank Declares ₹1.5 Per Share Dividend Amid Improved Profitability

Despite the mixed operational metrics, Bandhan Bank announced a final dividend of ₹1.5 per equity share for FY25, reflecting management’s confidence in the bank’s capital adequacy and earnings outlook. The dividend declaration comes even as sequential profit showed a dip, underlining a commitment to shareholder returns. Market participants will closely monitor whether this trend of rewarding shareholders continues in the upcoming quarters, especially as the bank continues to navigate asset quality and interest margin challenges.

Highlights:

• Final dividend for FY25 declared at ₹1.5 per share.

• Dividend signals confidence in earnings outlook despite sequential dip.

• Payout comes amid mixed quarterly performance.

Market Reaction Muted as Shares Fall 1.7% on BSE to ₹165

On April 30, Bandhan Bank shares closed 1.7% lower at ₹165 apiece on the BSE, indicating a lukewarm investor response to the earnings release. While the YoY profit surge appeared impressive on the surface, the decline in NII and the sequential fall in profit likely dampened investor sentiment. The bank has been underperforming broader financial indices due to persistent concerns around asset quality, microfinance exposure, and return metrics. Analysts believe sustained earnings improvement and clarity on margin trajectory are essential for a re-rating in the stock.

Highlights:

• Bandhan Bank stock closed 1.7% down at ₹165 on BSE.

• Market reaction cautious despite headline profit surge.

• Investors await consistent NII performance and margin visibility.