Bandhan Bank Ltd

Dear Shareholders,

It is with great privilege that I present your Bank's Annual Report for FY2024-25. This is a moment to reflect on the progress your Bank has made and the values that have shaped its journey. As your Bank continues to grow and evolve, we remain committed to building a resilient, inclusive, and purpose-driven institution.

From its inception with a bold vision for financial empowerment, your Bank has evolved into a trusted financial institution, grounded in resilience, transparency, and empathy. The theme of this year's report, ‘trust that grows, bandhan that strengthens', aptly captures the essence of what we have built together, a growing institution anchored in enduring relationships and shared purpose

The Indian economy demonstrated commendable resilience in FY25, sustaining its status as the fastest-growing major economy worldwide. GDP growth eased to 6.5% in FY25 due to a high base in the previous year. However, a strong 7.4% growth in the fourth quarter reaffirmed the economy's momentum. This recovery was driven partly by private consumption (over 7% growth), steady rural demand, and a resilient agricultural sector that grew by more than 4%. Additionally, construction activity surged, registering annual growth exceeding 9%. Gross Fixed Capital Formation (GFCF) rose by 9.4% in Q4 FY25, the fastest pace in six quarters, indicating increased investment in infrastructure and construction.

Despite external challenges, including heightened geopolitical tension and policy uncertainty and subdued global demand, India's structural strengths, favourable demographics, accelerating digital adoption, and supportive fiscal policies continued to provide macroeconomic stability. These trends created a conducive environment for credit growth and financial sector expansion. Sustained consumption and infrastructure investment are expected to drive continued demand for retail and corporate banking services, while a stable macroeconomic backdrop supports prudent risk management and long-term sectoral growth.

The Indian banking sector demonstrated resilience and adaptability in FY 2024-25 amidst evolving macroeconomic dynamics. Public sector banks (PSBs) strengthened their market position, particularly in home and MSME lending, supported by improved asset quality and effective credit guarantee mechanisms. Private sector banks continued to exhibit stability, although they exercised greater caution in unsecured retail and small business lending due to rising delinquency levels. The microfinance segment, however, faced headwinds with a contraction in the loan book, elevated credit costs, and increased delinquencies, particularly in specific pockets. Despite these challenges, sector-wide GNPA levels remained contained, and the regulatory outlook points to gradual normalisation in asset quality and credit performance into FY26.

Amid a challenging macroeconomic landscape and headwinds for the microfinance (MFI) segment during the latter half of FY 2024-25, marked by rising credit costs and moderated growth, your Bank displayed strong resilience and strategic agility. Despite these headwinds, Profit After Tax (PAT) for the full year rose by a robust 23% year-on-year to Rs.2,745 crore, highlighting your Bank's disciplined execution and focus on sustainable profitability. Building on this momentum, your Bank's digital transformation remained a key enabler of its strategic priorities, driving operational efficiency, enhancing risk management, and elevating customer engagement. Initiatives such as the establishment of the Transformation Management Team and the Digital and Transaction Excellence Unit have advanced automation, digital payments, and fee-based income streams, while the Market Intelligence Team leverages AI to provide realtime market insights. Additionally, your Bank's expanded government payment integrations have strengthened its presence in the public sector, collectively positioning your Bank as a digitally empowered, customer-centric institution ready to capture new growth opportunities.

This year also marked a critical transition in your Bank's leadership journey. Your Bank welcomed Mr. Partha Pratim Sengupta as the new Managing Director & CEO, effective November 1, 2024. A seasoned industry leader with expertise across business, credit, and technology, Mr. Sengupta brings with him a fresh perspective and strategic depth that will be instrumental in leading your Bank through its next phase—Bandhan Bank 2.0. His vision for a customer-centric, digitally enabled, and operationally efficient Bank is well aligned with your Bank's long-term goals. The leadership transition was seamless, further strengthening your Bank's governance and risk management frameworks, and reinforcing our commitment to regulatory compliance and operational resilience.

Throughout the year, your Bank remained steadfast in its commitment to good governance, risk discipline, and longterm value creation. We have expanded the scope of our conversations beyond just financial metrics to encompass the growing relevance of financial inclusion, digital equity, climate-conscious banking, and ethical leadership. Your Bank continues to evolve, ensuring its growth is not only inclusive but also sustainable. We recognise that while balance sheet strength is essential; it is trust, transparency, and social impact that define an enduring institution.

India's macroeconomic fundamentals remain supportive of sustained growth in the financial sector. GDP is projected to expand by around 6.5% in FY26, with inflation easing towards the lower end of the Reserve Bank of India's (RBI) target range. In response, the RBI reduced key policy rates and the Cash Reserve Ratio (CRR) in June 2025, signalling a more neutral monetary stance aimed at lowering funding costs, improving liquidity, and stimulating credit demand. Stable food prices and moderating inflation are expected to revive rural demand and support urban consumption. Investment activity is gaining momentum, driven by healthy corporate balance sheets, increasing private capital expenditure, and continued public infrastructure investment. While global uncertainties, geopolitical tensions, commodity price volatility, and climate-related risks persist, India's banking sector remains well-positioned to navigate these challenges.

In this promising environment, your Bank remains focused on leveraging these macro tailwinds by expanding its reach, deepening its customer relationships, and continuing to strengthen its balance sheet. We are confident that its diversified portfolio, robust capital base, and digital- led approach will enable your Bank to capture emerging opportunities and deliver sustainable growth in the years ahead.

As your Bank enters its second decade, it does so with renewed momentum, a sharper strategic vision, and a deep sense of responsibility to the millions of lives it serves.

The journey ahead is filled with both purpose and promise, and we are well-positioned to seize the opportunities it presents. With each passing year, we have gained not only scale but also a richer understanding of the evolving needs of our customers, communities, and stakeholders. We move forward with the confidence that comes from staying rooted in our founding values, of trust, inclusion, service, and resilience. These values have served as our compass, guiding us through dynamic economic landscapes and times of transformation.

Looking ahead, your Bank is more determined than ever to accelerate progress on its core priorities: delivering inclusive financial solutions, driving digital innovation, enhancing customer experience, and building a future- ready, sustainable bank. This agenda is firmly anchored in strong governance, regulatory compliance, and robust risk management, ensuring that its growth is both responsible and resilient. Your Bank's mission is not just to expand but to empower, not just to grow but to do so with integrity and accountability.

I would like to take this opportunity to express my deepest gratitude to all those who have been part of this journey - customers, employees, regulators, and shareholders, for your enduring trust and belief in your Bank's purpose.

Together, let us build not just a larger Bank, but a stronger, more inclusive, and future-ready institution that continues to stand the test of time and creates lasting value for generations to come.

Warm regards,