Bandhan Bank shares rise nearly 4% as December-quarter loans grow 10%
Bandhan Bank shares moved sharply higher on January 5, 2026, catching the attention of market watchers across Dalal Street. The stock gained nearly 4% in early trade after the bank shared its December-quarter business update. At the center of this reaction was one key number. Loan growth of around 10% year-on-year.
In a market where investors closely track credit demand, this update sent a clear signal. Borrowing activity is holding up. For banks, loan growth often reflects economic confidence. It also hints at future earnings strength. That is why even a routine business update can move a stock.
Bandhan Bank has spent recent quarters rebuilding trust after asset quality stress. So, every data point now carries weight. Investors are not just looking at growth. They are watching stability, funding mix, and execution.
Bandhan Bank Loan Growth & Deposit Trends in the December Quarter 2025
Bandhan Bank reported solid 10% year-on-year growth in loans and advances for the quarter ending December 31, 2025. This means the bank’s loan book increased from about ₹1.32 lakh crore to roughly ₹1.45 lakh crore compared with the same period in FY25. The growth shows continued demand for credit across segments at a time when many lenders are cautious. Total deposits also rose about 11% to around ₹1.57 lakh crore, though this figure dipped slightly from the previous quarter.
Even as total deposits rose annually, low-cost CASA (Current Account and Savings Account) deposits fell by nearly 4.5%, pushing the CASA ratio down to roughly 27.3%. Lower CASA means more reliance on higher-cost deposits, which could put pressure on the bank’s interest margins going forward.
One notable shift was in the retail deposit base. Retail deposits, including savings and term deposits, climbed around 17% year-on-year, accounting for over 72% of the total deposit mix. Retail term deposits in particular jumped nearly 36%, showing that customers preferred fixed return products amid changing rate conditions.
Asset Quality & Operational Signals
Bandhan Bank also highlighted a small improvement in asset quality trends in its provisional update. The bank’s collection efficiency, excluding non-performing assets, improved to about 98.1% in December compared to 97.8% in September 2025. This suggests borrowers are staying current on repayments, which is a positive sign for credit risk management.
The bank’s liquidity position remained strong with a comfortable Liquidity Coverage Ratio (LCR) of around 149%. This buffer is well above regulatory minimums and gives the bank flexibility to manage short-term outflows without stress.
Market Reaction: Bandhan Bank Share Price & Valuation Signals
On January 5, 2026, Bandhan Bank’s shares climbed nearly 4%, reaching an intraday high of approximately ₹150 after the business update hit the market. This jump reflected investor confidence in the bank’s improving credit growth and business momentum.
Despite the rise, the stock still trades below its recent 52-week high of about ₹192, leaving room for potential upside if growth continues. The market also views its valuation as reasonable, with metrics like the price-to-earnings (P/E) ratio near 19 and price-to-book (P/B) around 0.96. These figures suggest the stock isn’t expensive relative to its current earnings and book value.
Bandhan Bank Funding Mix & Competitive Context
Bandhan’s shift towards higher retail deposits and term deposits may help build a more stable funding base over time. However, the drop in CASA signals the bank could face higher funding costs in the near term. This is important because CASA deposits are cheaper for lenders and support higher net interest margins.
Across the banking sector, credit growth has been picking up in the latest quarter for many players as economic activity rises after a lull in mid-2025. Major banks like HDFC Bank and Bank of Baroda also reported strong loan advances, pointing to a broader trend of demand for credit.
Challenges and Watch Areas
A key challenge will be whether Bandhan can maintain growth without eroding margins. The decline in low-cost CASA deposits could mean the bank pays more for funding. Another focus for investors will be how the bank manages asset quality as the loan book grows, especially in more risk-sensitive segments.
Looking Ahead & Closing
The December-quarter results show that Bandhan Bank is regaining business momentum, with credit demand strong and deposits up. But the journey ahead may require balancing funding cost pressures with quality loan growth. The stock’s recent rise reflects this cautiously optimistic view from investors, even as broader banking sector trends play out.
Frequently Asked Questions (FAQs)
Bandhan Bank shares rose on January 5, 2026, after the bank reported about 10% year-on-year loan growth for the December quarter, which improved investor confidence in business stability.
Bandhan Bank reported nearly 10% loan growth in Q3 FY26, ending December 31, 2025, showing steady credit demand despite a competitive banking environment and cautious lending conditions.
Bandhan Bank’s stock outlook remains neutral as of January 2026. Loan growth is positive, but investors are also watching deposit mix, funding costs, and asset quality before making long-term decisions.
Disclaimer
The content shared by Meyka AI PTY LTD is solely for research and informational purposes. Meyka is not a financial advisory service, and the information provided should not be considered investment or trading advice.
