MUMBAI, Oct 18, 2025 — Indian private lender IndusInd Bank Ltd. (INBK.NS) reported a net loss of ₹4.36 billion ($49.56 million) for the quarter ended September 2025, marking its first quarterly loss under new CEO Rajiv Anand. The results come as the bank strengthens provisions for bad loans and reevaluates its business strategy following a turbulent year marked by governance lapses and executive departures.
Earnings Miss Analyst Expectations
Analysts had projected a quarterly profit of around ₹6.37 billion, according to LSEG data. Instead, IndusInd Bank posted a sharp reversal from the ₹13.31 billion profit it recorded in the same quarter last year.
The decline follows a difficult period for the Mumbai-based lender, which earlier in 2025 reported its largest-ever quarterly loss due to a $230 million accounting adjustment tied to governance issues.
New CEO Rajiv Anand, who assumed leadership at the end of August, said the financial impact of these discrepancies has now been fully recognized. “The accounting clean-up is behind us, and we are focused on restoring long-term stability,” Anand told reporters.
Provisions Increase by 44% Amid Loan Stress
For the September quarter, IndusInd Bank increased its provisions and contingencies by 44%, reaching ₹26.22 billion, as the bank built additional buffers to manage risk in its microfinance portfolio.
Anand said the lender decided to step up provisions against micro loans, a segment showing early signs of stress across the industry. The bank also wrote off certain microfinance assets, further adding to the provisioning burden.
Despite the higher provisions, the bank’s gross non-performing asset (NPA) ratio remained stable at 3.6%, reflecting a controlled risk environment.
Loan Book and Deposits Decline
IndusInd Bank’s loan book shrank by 9% year-on-year, while deposits fell 6%, signaling continued caution in lending activity.
The bank’s net interest income (NII) dropped 18% year-on-year to ₹44.09 billion, as margins were squeezed following the Reserve Bank of India’s recent interest rate cuts.
The net interest margin (NIM) — a key profitability metric — declined to 3.32% from 4.08% a year earlier. Lower rates tend to compress margins since banks pass on benefits to borrowers more quickly than they adjust deposit rates.
Strategic Shift Under CEO Rajiv Anand
Under Anand’s leadership, IndusInd Bank is reviewing its overall business model to reduce earnings volatility and strengthen its long-term sustainability.
“We are working toward a more diversified loan book that’s less exposed to cyclical risks,” Anand said.
The bank plans to expand into mortgages and other secured lending categories known for lower delinquencies. At the same time, it will reassess the scale of its microfinance portfolio, which currently accounts for a significant portion of its assets through its subsidiary Bharat Financial Inclusion Ltd.
As of September 2025, Bharat Financial’s loan book stood at ₹213.21 billion, down 35% year-on-year, highlighting a conscious effort to de-risk the portfolio.
Outlook: Focus on Stability and Governance
The new management’s near-term focus remains on strengthening governance, improving asset quality, and restoring investor confidence.
IndusInd Bank has begun assigning accountability for past governance lapses — a process Anand said would be “concluded over the next few quarters.”
While challenges persist, analysts say the clean-up phase positions the bank for gradual recovery in fiscal 2026. The shift toward diversified retail lending and cautious provisioning could help the lender regain momentum in India’s competitive private banking sector.
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