Bandhan Bank shares jump 4% on reports of UAE’s FAB exploring stake acquisition

Shares of Bandhan Bank rose nearly 4% in early trade on Tuesday following reports that First Abu Dhabi Bank (FAB) is considering acquiring a stake in the mid-sized private sector lender. The stock was also in focus ahead of Bandhan Bank’s September-quarter results, scheduled for October 28.

Reacting to the news, Bandhan Bank shares climbed as much as 3.97% to ₹157 on the BSE. At the time of reporting, the private lender stock was trading 2.7% higher at ₹155.10, valuing the bank at around ₹24,989 crore.

According to a Moneycontrol report, FAB’s senior management has held discussions with Bandhan Bank and a Kerala-based lender as it explores potential acquisition opportunities in India. FAB is reportedly considering acquiring a 51% majority stake if a deal goes ahead.

Other potential candidates include older private sector lenders that are trading at or below their book values, the report said, citing investment bankers. Mid-sized lenders such as Bandhan Bank and old private sector lenders, including CSB and South Indian Bank, are trading at book value or slightly lower.

FAB currently has two branches in India, in Mumbai and GIFT City. Its reported interest in acquiring an Indian lender is part of a broader diversification strategy, with India’s growth prospects and strategic position along major East–West trade routes adding to its appeal.

Meanwhile, Bandhan Bank clarified in an exchange filing that it was not involved in any such discussions and that the reference to the bank in the aforementioned article was factually incorrect.

“The Bank categorically denies the reported speculation regarding any acquisition-related discussions or proposal involving Bandhan Bank and First Abu Dhabi Bank,” it said.

The bank added that it places the utmost importance on regulatory compliance and continues to comply with the applicable requirements under Regulation 30 of the SEBI Listing Obligations and Disclosure Requirements (LODR) Regulations.

Bandhan Bank to announce Q2 results tomorrow

The board of Bandhan Bank will meet on Wednesday, October 28, to consider and approve the lender’s financial results for the September quarter of FY27.

In the June quarter, Bandhan Bank reported a 34.8% year-on-year increase in net profit to ₹501.7 crore, compared with ₹372 crore in the corresponding quarter last year. Net interest income (NII) rose 5.9% to ₹2,921 crore from ₹2,757 crore a year earlier, while net interest margin (NIM) remained stable at 6.2%.

The bank’s asset quality improved during the quarter, supported by lower slippages in its Emerging Entrepreneurs Business (EEB), formerly known as its microfinance portfolio. It retained its FY27 credit growth guidance at around 14% and credit cost guidance at 1.6-1.8%.

However, the lender lowered its FY27 exit return on assets (RoA) guidance to 1.2-1.4% from the earlier target of 1.6-1.8%, signalling a slower recovery in profitability than previously expected.

Management attributed the revision to higher funding costs, intense competition for deposits, a challenging operating environment and elevated operating expenses. The September-quarter results will be watched for signs of improvement in margins and profitability, alongside progress on asset quality.