IndusInd Bank has reported a net loss of Rs 437 crore for the quarter ended September 2025 mainly due to higher provisions made in the microfinance segment. In the corresponding quarter a year ago, the bank reported a net profit of Rs 1,331 crore.
According to Bloomberg estimates, analysts had expected the net profit at Rs 469 crore and net interest income at Rs 4,424 crore for the reporting quarter.
“The financial performance of this quarter was impacted due to sharp reduction in the microfinance business and lack of treasury gains. This is partly offset by improvement in cost of funds as well as containing operating expenses,” Rajiv Anand, MD and CEO of IndusInd Bank, said.
Anand said that the call to take accelerated provisioning was done to rationalise the outstanding bad loan book.
The provisions for the reporting quarter were up nearly 45% on year to Rs 2,631 crore. Out of this, the bank made an incremental provision of Rs 900 crore on the microfinance segment, the company said.
In terms of asset quality, the non-performing asset (NPA) ratios improved with the gross NPA ratio at 3.60% as on September 30 as compared to 3.64% a quarter ago and the net NPA ratio at 1.04% from 1.12% a quarter ago.
The bank wrote off loans worth Rs 1,579 crore of microfinance loans and increased coverage on the residual microfinance NPAs. “We have tightened underwriting standards, controls, and that has in a sense resulted in lower disbursements during the quarter. We do anticipate that over the next four to six months, this should begin to normalise and then look to build for growth,” he said.
The net interest income also fell by 18% on year to Rs 4,409 crore in the reporting quarter. Other income was down 24% on year, due to lower treasury gains. Net interest margin of the bank moderated by 14 basis points on quarter to 3.32% in Q2.
In terms of balance-sheet, loan growth and deposit growth fell by 9% and 6% on year, respectively. Anand said the bank remains cautious on microfinance, but expects that the credit guarantees would reduce the extreme swings in cash costs through the cycle. He added that the bank is seeing opportunities in the retail business and plans to grow in segments such as micro, small and medium enterprises. He added that they wanted to grow their home loan book irrespective of the cost of funds disadvantage. The bank aims to invest in building coverage and capabilities, particularly in the mid and small corporate sector.
Within deposits, the current account and savings account (CASA) deposits fell 19% on year to Rs 1.19 lakh crore as on September 30. The bank aims to focus on the low-cost deposits.
On building the leadership team, Anand said that few senior officials would be joining the bank in the coming months.