IndusInd Bank reported a net loss of ₹437 crore in the September quarter, compared to a profit of ₹1,331 crore a year ago. Net Interest Income (NII) decreased by 18% to ₹4,409 crore. Provision expenses increased by 45% to ₹2,631 crore. However, the bank's asset quality and capital buffer remained stable.
IndusInd Bank Q2 Results: IndusInd Bank recorded a net loss of ₹437 crore in the September quarter of fiscal year 2025, in contrast to a profit of ₹1,331 crore in the same quarter last year. The primary reasons for this loss are an 18% decline in Net Interest Income and a 45% increase in provision expenses. The bank's asset quality remained stable, with Gross NPA at 3.60% and Net NPA at 1.04%. Total deposits decreased to ₹3.90 lakh crore, and advances stood at ₹3.26 lakh crore.
Decline in Net Interest Income and NIM
IndusInd Bank's Net Interest Income (NII) declined by 18% year-on-year to ₹4,409 crore in the September quarter. In the same quarter last year, it was ₹5,347 crore. Concurrently, the bank's Net Interest Margin (NIM) also fell to 3.32% from 4.08% in the previous year. The main reasons cited for this decline in NII are a reduction in interest income and increasing risks in certain sectors.
Surge in Provisions and Contingency Expenses
The bank's provision and contingency expenses surged by 45% to ₹2,631 crore in the September quarter. A year ago, these expenses were ₹1,820 crore in the same quarter. The bank has made additional provisions and write-offs, considering the increasing pressure in its microfinance portfolio. Rajiv Anand, Managing Director and CEO of IndusInd Bank, stated, “Taking cautious steps in the microfinance sector, we have made additional provisions and some write-offs. While this has resulted in a loss for the quarter, it will strengthen our balance sheet and accelerate the process of normalizing profitability.”
Stability in Asset Quality
Despite the challenges, the bank's asset quality remained stable in the September quarter. Gross NPA stood at 3.60%, slightly down from 3.64% in the June quarter. Net NPA was 1.04%, improved from 1.12% in the June quarter. The provision coverage ratio increased to 71.81% from 70.13% in the previous quarter. This figure indicates that the bank has made adequate provisions for risk management and to cover potential losses.
Decline in Deposits and Advances
In the September quarter, IndusInd Bank's total deposits decreased to ₹3.90 lakh crore, compared to ₹4.12 lakh crore a year ago. Advances also fell to ₹3.26 lakh crore from ₹3.57 lakh crore last year. The bank's low-cost Current and Savings Account (CASA) deposits constituted 31% of the total, with Current Accounts at ₹31,916 crore and Savings Accounts at ₹87,854 crore.
The bank's total balance sheet size contracted to ₹5.27 lakh crore in the September quarter, down from ₹5.43 lakh crore last year. This figure indicates that the bank has focused on capital management and risk control.
Bank's Future Strategy
During the quarterly results, IndusInd Bank clarified that the current loss is temporary. The bank has taken steps to reduce risk in its microfinance portfolio and increase provisions. Furthermore, the bank is focusing on strengthening its balance sheet and ensuring long-term profitability.
