IndusInd Bank Q1 Net Profit Down 72%

Mumbai, Jul 28 (PTI) Private sector lender Indusind Bank on Monday reported a 72 per cent drop in its consolidated net profit for the June quarter to Rs 604 crore, and assured that there will not be any more financial impact of past frauds.

The bank, which is reeling under a slew of issues stemming from alleged irregularities of the top management in recognising bad loans and trading reverses, had reported a net profit of Rs 2,171 crore in the year-ago period.

It had reported a loss of Rs 2,329 crore in the preceding March quarter, and the interim management, which has taken over operations of the business after the resignation of leadership including then chief executive Sumant Kathpalia, had said that all the possible impacts are recognised.

Total income dropped to Rs 14,420.80 crore in the April-June quarter of FY26 compared to Rs 14,988.38 crore in the year-ago period.

IndusInd Bank Chairman Sunil Mehta said the bank has delivered "clean and profitable" results in the June quarter, marking a "robust recovery" from the March quarter.

"We have delivered Q1 results without any carry over of the prior period irregularities. Financial impact of legacy issues is behind us," Mehta told analysts over a call.

There was no impact of the legacy issues in the first quarter results as well, he said, adding that the interim management is working to restore the lost ground so that the entity can perform to its potential.

Time was spent by the management in resolving the concerns on the microfinance and the treasury side which had led it to admit fraud as well, he said, specifying that it includes upping governance and transparency, and also improving board oversight on the MFI side, while on the treasury front, it has upped the system and stopped internal deals.

The bank is also progressing well on the appointment of a full-time chief executive and awaiting regulatory approval on the candidates it has sent, he said, adding that efforts to build a senior management team from both the internal talent of over 45,000 people and external ones, is also on simultaneously.


The board has also outlined a five-point strategy for bettering the performance going ahead, which includes reducing deposit rate offerings, pulling away from low margin business and stringent cost management, he said.

Mehta said the bank is planning to more than halve the overall operating expenses growth to single digits from the 20 per cent level it has witnessed in each of the last five years. Apart from this, the incoming CEO will come out with a detailed strategic roadmap.

During the reporting quarter, the lender's core net interest income also declined to Rs 4,640 crore from Rs 5,408 crore a year ago. The advances de-grew 4 per cent on year, and the margins were lower by 0.79 per cent on-year.

Deposits de-grew 3 per cent as it shed the higher-cost wholesale or bulk deposits.

Decline in fee and other income was relatively limited, with the overall number dropping to Rs 2,157 crore from Rs 2,442 crore in the year-ago period.

The gross non-performing assets ratio for the lender increased to 3.64 per cent in June against 3.13 per cent in March, but the provisions declined on-quarter to Rs 1,760 crore from Rs 2,522 crore. The fresh slippages nearly halved to Rs 2,567 crore on-quarter, and included Rs 2,322 crore of consumer bank.

The management said the bank continues to be cautious on the microfinance business, and does not expect growth till Q3 of FY26. However, unlike its larger rival Kotak Mahindra Bank, it does not see any stress in the construction vehicles business and will be working towards growing it as the slippages will be lower in FY26 than the fiscal-ago period.

The overall capital adequacy of the lender stood at 16.63 per cent as of June 30, and included a core buffer of 15.48 per cent, and the management said they have not heard any progress on the promoters' move to increase stake.

Indusind Bank shares closed 2.62 per cent down at Rs 802.15 on BSE ahead of the results announcement, as against a 0.70 per cent correction on the benchmark Sensex.