Rajiv Anand said he and the senior team are assessing every single business and support function to leverage opportunities for the Bank to improve its functioning and grow its business | Photo credit: REUTERS
Accelerated provisioning for microfinance activities, sharp reduction in microfinance portfolio and lack of gains on government bonds impacted IndusInd Bank’s second quarter (Q2FY26) results.
The private sector lender fell into the red, reporting a net loss of ₹445 crore, against a net profit of ₹1,325 crore in the year-ago quarter and ₹684 crore in the previous quarter (Q1FY26).
Rajiv Anand, who took over the reins of the Bank as MD & CEO on August 25, 2025, noted that the financial impact was partly offset by an improvement in funding costs (to 5.43 per cent in Q2FY26, from 5.69 per cent in Q126), and by controlling operating costs (up 2 per cent to ₹4,013 crore, from ₹ 3,932 crore by 2025). Q2FY25).
“We have written off ₹1,579 crore of microfinance loans and increased coverage on the remaining non-performing assets of MFIs (NPAs). We believe this is a prudent move and strengthens the balance sheet,” he said.
The Bank’s microloan portfolio declined by ₹7,087 crore during the quarter and stood at ₹21,321 crore at the end of September 2025.
Anand underlined that while the bank will continue to grow in its key areas – auto finance and micro-lending, it sees huge opportunities to grow its retail assets. This is not only intended to diversify the loan portfolio, but also to support the liability franchise.
“The MSME space is a big opportunity for a bank of our size. We have a minuscule presence here, and we will expand it as we move forward. We have a small presence in the home loan segment, but are scaling it up regardless of the cost of funds disadvantage,” the IndusInd Bank head said.
“The uncovered segments are also now poised for cyclical growth. We believe the retail segment will make a meaningful contribution to our growth going forward,” he added.
Assess every company
Anand said he and the senior team are assessing each individual business and support function to leverage opportunities for the Bank to improve its functioning and grow its business.
This observation comes in the backdrop of the Bank’s accounting of the discrepancies identified during the financial year ended March 31, 2025 in respect of accounting for derivatives transactions worth ₹ 1,959.98 crore, accounting for interest and commission income aggregating to ₹ 846.40 crore in respect of the MFI portfolio, and manual entries in the ‘Other assets’ and ‘Other liabilities’. amounting to ₹595 crore.
To a question whether the Bank will determine liability for the above deficiencies, Anand replied in the affirmative, with action likely in the next few quarters.
Published on October 18, 2025
#Accelerated #provisions #microfinance #activities #put #IndusInd #Banks #results #red