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Shares of Bandhan Bank tumbled over 15 percent on July 22 as during the Q1 results of the bank, the management lowered their exit Return on Assets (RoA) guidance to 1.2%–1.4% (from 1.6%–1.8%) citing higher funding and tech costs. The private sector lender reported their June quarter earnings and warned that Net Interest Margins (NIMs) are likely to remain under pressure over the next two quarters, prompting the bank to lower their profitability guidance for FY27.

The management attributed the downward revision to a challenging external environment marked by elevated funding costs, geopolitical tensions in West Asia, energy price volatility, unpredictable monsoon and higher technology investments. Equirus Securities, in its post-results report, noted that "NIMs remained stable quarter on quarter at 6.2%, but elevated Cost of Funds and deposit competition are expected to pressure margins," while adding that Bandhan Bank's management expects higher cost of funds to keep margins under strain. The brokerage also highlighted the impact of the revised profitability outlook, saying, "management maintained opex-to-assets guidance at 4.2% but lowered its Return on Assets target to 1.2-1.4% (from 1.6-1.8%), reflecting a 30 basis points hit from margin pressure and 10 basis points from higher opex." As per Bandhan Bank, higher operating expenditure is being driven by continued investments in technology, including cloud infrastructure, hardware, software and loan origination platforms, even as these investments are expected to improve operating efficiency over the medium term.