IndusInd Bank Q2 Results: Lender Swings Into Loss Of Rs 436 Crore As Provisions Rise 50%

IndusInd Bank Ltd. reported a net loss of Rs 436 crore on a consolidated basis for the September quarter, compared with Rs 604 crore profit in the previous three months, according to its notification to the exchanges on Saturday.

Net interest income fell 5% to Rs 4,409 crore from Rs 4,640 crore in the previous quarter. Asset quality saw slight improvement, with the ratio of gross non-performing assets seeing a downtick to 3.60% from previous quarter's 3.64% and the net NPA ratio coming down to 1.04% from the June quarter's 1.12%.

IndusInd Bank Q2 Results (Consolidated, QoQ)

• Net interest income fell 5% to Rs 4,409 crore from Rs 4,640 crore.

• Gross NPA fell four basis points to 3.60% from 3.64%.

• Net NPA fell eight basis points to 1.04% from 1.12%.

• Provisions rose 50% to Rs 2,631 crore from Rs 1,760 crore,.

• Net loss came up to Rs 436 crore versus profit of Rs 604 crore.

"Our asset quality trends have been stable in all core businesses except in microfinance wherein industry is facing cyclical pressures," managing director and chief operating officer Rajiv Anand said in a press release. "The bank accelerated write-offs as well as increased provisions on microfinance as a prudent measure."

IndusInd Bank registered a negative return on assets, which fell to -0.33%, down 78 basis points on a sequential basis. Even the return on equity turned up negative, falling 639 basis points from the previous quarter.

Advances as of Sept. 30, 2025, were ₹3,25,881 crores as against ₹3,57,159 crores previous year

Advances fell 2% on the quarter to Rs 3.25 lakh crore, while total deposits also saw a 2% decline over the same period to Rs 3.89 lakh crore as on Sept. 30.

The company's net interest margin fell 14 basis points to 3.34% for the September quarter compared to the previous three months.

CASA ratio, on a sequential basis, remained flat at 31%.

In a post-earnings media call, the Bank's chief financial officer Viral Damania explained that the NII fell due to the provisions in the lender's microfinance portfolio. He explained that accelerated write-offs in the quarter under review led to higher provisions, which in turn led to the company reporting a net loss for the quarter.

To add some context, IndusInd Bank's microfinance provisions rose Rs 872 crore on a sequential basis, and the bank wrote off bad loans worth Rs 1,940 crore in the quarter under review.

Managing director Anand also stressed that the Bank has tightened underwriting and controls on microfinance, and anticipates growth to normalise in up to six months.

The bank's financial results included the financial results of its wholly owned subsidiary, Bharat Financial Inclusion Ltd. which is involved in originating small ticket loans for the bank.

During the quarter, Bharat Financial continued review and investigation of matters relating to operational losses, unapproved practices and inappropriate invoices of certain service provider, the bank said. These practices could be indicative of governance lapses and management override of controls, IndusInd Bank added. It also said that the Bank does not expect any material financial loss expected after the review is completed.

Commenting on the development, Anand explained that auditors of microfinance subsidiary have identified certain inappropriate payments to collection agents, but the impact of these governance concerns are negligible the bank's financials.