In Q1 FY26, Bandhan Bank's microfinance portfolio accounted for 70% of its gross slippages: Sengupta, the CEO

The Emerging Entrepreneurs Business (EEB), the bank's main microfinance portfolio, accounted for Rs 1,089 crore, or around 70%, of the Rs 1,553 crore in gross slippages reported in Q1 FY26. Managing Director and CEO Partha Pratim Sengupta revealed the information on the bank's July 18 post-results analyst call. The majority of small-ticket, unsecured loans to low-income female borrowers make up the bank's microfinance portfolio. "We continue to provide the same guidance," Sengupta stated. "We predicted that loan costs would essentially stay the same in Q1, but fortunately, they are somewhat lower than they were in the March quarter. Thus, that is a positive sign. The bank made provisions of Rs 1,147 crore in the quarter, including Rs 1,055 crore in technical write-offs, to protect against additional stress. Older microfinance accounts were responsible for around Rs 950 crore of this. During the analyst call, Chief Risk Officer Kumar Ashish explained that they were older non-performing assets (NPAs) rather than new delinquencies. "It's not something that's new; it's for a considerable amount of vintage," he stated. In the first quarter of FY26, Bandhan Bank reported gross slippages amounting to Rs 1,553 crore, with its core microfinance segment, the Emerging Entrepreneurs Business (EEB), contributing Rs 1,089 crore—approximately 70% of the total. This significant share underscores the continued stress within the microfinance portfolio, which primarily consists of small-ticket, unsecured loans extended to low-income women borrowers. The data was shared by the bank’s Managing Director and CEO, Partha Pratim Sengupta, during the post-results analyst call on July 18. Despite the high slippages, Sengupta offered a slightly optimistic outlook, noting that loan costs in Q1 were marginally lower than in the March quarter. He emphasized that the bank had expected loan costs to remain steady, and the slight decline was a positive sign. This suggests that while legacy issues persist, current asset quality trends are not deteriorating further, offering some comfort to stakeholders and investors. To address the stress in its loan book, Bandhan Bank made total provisions of Rs 1,147 crore during the quarter, which included technical write-offs worth Rs 1,055 crore. A substantial portion of these provisions—around Rs 950 crore—was attributed to older microfinance accounts. According to Chief Risk Officer Kumar Ashish, these were long-standing non-performing assets (NPAs) rather than newly emerged delinquencies, indicating that the bank is continuing its efforts to clean up legacy bad loans.