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IndusInd Bank reported a higher-than-expected quarterly profit, supported by a sharp reduction in provisions for bad loans and an improvement in asset quality. The lender posted a profit of INR 5.33 billion for the quarter ended March-end, above analyst estimates of INR 3.89 billion. The improvement came after a challenging previous year marked by governance concerns and a large accounting-related loss. Asset quality strengthened as gross bad loans declined, while credit costs eased. However, loan and deposit growth remained under pressure even as net interest income recorded strong growth during the quarter.
IndusInd Bank, the country’s fifth-largest private sector lender by market value, reported stronger-than-expected quarterly earnings, driven mainly by lower provisions and improving asset quality. Advertisement
The bank posted a net profit of INR 5.33 billion for the quarter ended March-end, surpassing analyst expectations of INR 3.89 billion based on LSEG-compiled estimates. In dollar terms, this was approximately USD 56.55 million. The performance marked a recovery from the same period a year earlier, when the bank had reported its steepest-ever quarterly loss due to misaccounting in internal derivative trades spanning several years.
The lender saw a significant decline in provisions and contingencies, which fell 38.6% year-on-year and 29% compared to the previous quarter, reaching INR 14.84 billion. This reduction reflected easing stress in certain loan segments, particularly microfinance, where the bank had previously faced elevated bad loan levels. Analysts noted that tighter lending practices helped control fresh slippages and supported overall asset quality improvement.
Gross non-performing assets improved to 3.43% of total loans, down from 3.56% in the previous quarter, indicating gradual stabilization in the bank’s loan book.
The bank had been under scrutiny after disclosing a USD 230 million impact in the financial year ended March 2025 linked to misreporting of internal derivative trades. This incident had raised governance concerns and resulted in leadership changes, including the resignations of the former chief executive officer Sumant Kathpalia and deputy chief Arun Khurana.
Veteran banker Rajiv Anand, who assumed leadership in August, indicated a strategic shift towards segments with relatively lower credit stress. This approach has started reflecting in asset quality metrics, although overall business momentum remained uneven.
Loan growth continued to decline, with advances falling 8.7% year-on-year, marking the fourth consecutive quarter of contraction. Deposits also dropped 2.6% during the same period, indicating continued balance sheet pressure.
Despite this, net interest income rose sharply by 43% year-on-year to INR 43.71 billion, supported by better spreads and improved lending yields.
Source Reuters
5th Jun, 2025
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