IndusInd declines net due to increase in provisions and expects better in the fourth quarter

Mumbai: Hindujas-promoted lender IndusInd Bank on Friday reported a sharp 91% decline in third-quarter net profit to ₹128 crore as asset quality deteriorated and provisions rose. But the bank swung to a profit after posting a loss of ₹437 crore in the second quarter, after accelerated microloan disbursements and the lingering impact of prolonged misreporting of derivatives transactions hit earnings in the three months to September. IndusInd had posted a profit of ₹1,402 crore in the December quarter last year. The lender had disclosed the potential losses related to the incorrect reporting of the derivatives in March last year.In the immediate aftermath, regulatory investigations began, bringing down the former leadership, including long-standing CEO Sumant Kathpalia.

On Friday, new MD and CEO Rajiv Anand said the board has now put in place the leadership needed to rebuild the lender’s credibility.

“I am very pleased with the leadership team we have been able to build,” Anand said. “I am confident that this will be the foundation for building a significantly better bank in the future – not just in the next one or two quarters, but for the foreseeable future.”

Anand also added that the bank is well capitalized and there is no immediate proposal to raise capital. The promoters had earlier said they would inject money into the lender if necessary.

Net interest income (NII), or core income, rose 13% year-on-year to ₹4,562 crore, compared to ₹4,028 crore in the same period last year. Net interest margin (NIM), or core profitability, stood at 3.5% during the quarter, compared to 3.3% in Q2FY26.

The bank’s gross non-performing assets (GNPA) rose to 3.6% of gross advances at the end of the December quarter, compared to 2.3% a year ago. Net NPAs also rose to 1.0% of net advances from 0.7% YoY. Provisions and contingencies for the quarter stood at ₹2,096 crore, up 20% from ₹1,744 crore a year ago. Gross slippages increased to ₹2,560 crore during the quarter compared to ₹2,200 crore in the same period last year. “If you look at the composition of the slippages, we see a steady trend, except to some extent in the auto finance and microfinance businesses,” Anand said. “We have seen major slippages and declines in microfinance. We expect both numbers to improve as we move into the fourth quarter.” Anand added that increasing disbursements in the microfinance portfolio are showing better performance compared to the recent past.

NON-EXECUTIVE CHAIRMAN APPOINTED
The bank said it has appointed former State Bank of India (SBI) managing director Arijit Basu as non-executive chairman. Basu replaces incumbent Sunil Mehta, who is retiring this month. Basu’s appointment will take effect on January 31, 2026, for a period of three years, subject to shareholder approval.