MUMBAI: IndusInd Bank, which had red ink all across its book in the past quarter due to an internal accounting scam that shaved off more than Rs 2,340 crore, has managed to return to the black sequentially on a standalone basis in the June quarter but with a very weak set of numbers as net income plunged by a whopping 68% on-year to Rs 684 crore.
The bank promoted by the Hindujas in fact had nothing in its books to write home about. On a consolidated basis, net profit fell 72 percent on-year to Rs 604 crore, according to the investor presentation on Monday.
Despite the all-round poor show, brokerages said the figures are much better than they had penciled in, given the bad set of numbers it had reported in the previous quarter.
In anticipation of more bad numbers, investors were averse to hold on to the bank’s shares leading to a massive sell-off in its counter. After losing 5% in the intra-day, the stock finally closed with deep cuts at Rs 802.05 losing 2.63% of its value.
The management led by non-executive chairman Sunil Mehta and interim executive committee led by Soumitra Sen and Anil Rao told analysts that “though the numbers are weak they are fully clear off any one-offs and the March quarter chapter is fully behind the bank.”
Mehta said the sole focus of the bank is to maintain profitability and prepare itself for the next phase of growth under a soon to be coming CEO, whose appointment is pending with the regulator, RBI.
Gross NPAs jumped to 3.64% in June 2025 from 3.13% in March 2025, while net NPAs rose to 1.12% from 0.95% during the same period. But the provision coverage ratio was stable at 70 as provisions and contingencies for the June quarter declined to Rs 1,760 crore from Rs 2,522 crore in the March quarter. Total loan related provisions were at Rs 10,472 crore or 3.14% of the loan book, they said, attributing the spike in NPAs to the bank’s inability to sell NPAs to ARCs or as SRs due to poor profits.
In the previous quarter, the bank had reported its biggest-ever quarterly loss, as it took a nearly Rs 2,000-crore hit to its accounts in the year to March due to years of mis-accounting of internal derivative trades. Mehta said the bank has stopped the internal trading book for now.
The March quarter net loss of Rs 2,328 crore was the first loss it has reported in the previous 20 years, with the last instance of the fifth largest private sector lender reporting a loss coming in the March 2006 quarter when Bhaskar Ghosh was at the helm. The only other instance was in the March 2001 quarter.
However, the bank had better margins with the NIM pricing in at 3.46%, of which 11 bps was contributed by higher recoveries and income tax refunds.
For the June 2025 quarter, the bank said its net interest income fell 14% to Rs 4,640 crore on a standalone basis hurt by decline in loans and rise in provisions for potential bad loans. Fee and other income also fared badly at Rs 2,157 crore compared to Rs 2,442 crore, pulling down total income to Rs 14,421 crore from Rs 14,988 crore.
Advances fell 4% on-year to Rs 3.34 trillion but inched up sequentially by 6% led by retail. Of the total advances, its vehicle loans stood at Rs 96,357 crore, non-vehicle finance at Rs 76,508 crore, and micro loans at Rs 28,408 crore. All these segments are part of the consumer banking business. Corporate loans at Rs 1.33 trillion constitute 40% of total advances.
Deposits also inched down to Rs 3.97 trillion from Rs 3.98 trillion which Mehta said was due to the bank letting go of some high cost certificates of deposits issued in March and also some term deposits.
On the lingering pains in the microfinance book, which they described as an industry issue and not limited to them alone, they said it will at least take another three to six months to stabilize, until which they will be very cautious.
As part of the focus on profitability, Mehta also said the bank will be spending much less on opex going forward. From an annual growth spend of 25% each year in the past four years, it will fall to single digits, he said.
The management also ruled out fundraising, saying the bank is sitting on an excess liquidity amount of Rs 52,700 crore and loan growth remains weak.