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IndusInd Bank reported a strong financial performance for the June quarter, with consolidated net profit rising 72% year-on-year to INR 1,037.05 crore, supported by lower provisions and an improvement in asset quality. The bank said the measures taken over the past year have strengthened its balance sheet and business fundamentals following governance-related challenges. While loan growth remained subdued and net interest income saw only a marginal rise, the lender expects stronger business momentum, better profitability, expanding margins in the second half of FY27, and loan growth in line with the industry.
Private sector lender IndusInd Bank reported a 72% year-on-year increase in its consolidated net profit for the June quarter, with profit after tax rising to INR 1,037.05 crore from INR 604.07 crore in the corresponding period last year. The lender had posted a profit of INR 594.17 crore in the preceding quarter.
The improved performance comes after a challenging period for the bank, which had faced governance-related issues and allegations involving fraudulent accounting practices as well as irregularities in its microfinance business. Those developments had earlier resulted in the bank reporting a quarterly loss and led to changes in its top management.
Speaking to reporters, Managing Director and Chief Executive Officer Rajiv Anand said the strategic measures taken over the past year have significantly strengthened the bank’s balance sheet, earnings profile and operating platform. He said the lender has entered FY27 with stronger fundamentals, improved resilience and positive business momentum.
The bank said its key priorities going forward include accelerating profit growth across business segments, strengthening its deposit franchise, expanding transaction banking services and making greater use of digital technology and artificial intelligence to improve customer experience, operational productivity and risk management.
Anand also said the bank is well placed to deliver sustainable growth, supported by a strong capital position, adequate liquidity, improving asset quality and a stronger operating platform.
For the April-June quarter, net interest income, which is the difference between interest earned and interest paid, increased 1% year-on-year to INR 4,685 crore. The growth remained limited due to a 2% decline in the loan book and compression in the bank’s net interest margin (NIM).
The NIM stood at 3.35% during the quarter compared with 3.46%, excluding the one-time impact of an INR 284 crore income tax refund recorded in the previous period.
Despite the pressure on margins, Anand expressed confidence that net interest margins would improve during the second half of the current financial year. He also maintained that IndusInd Bank expects its loan growth in FY27 to remain broadly in line with overall industry growth.
The bank’s non-interest income declined during the quarter, with other income falling 17% year-on-year to INR 1,787 crore.
However, profitability received support from a significant reduction in credit costs. Provisions and contingencies declined 21% to INR 1,384 crore compared with the corresponding period last year.
Asset quality also showed improvement during the quarter. The bank’s gross non-performing asset (GNPA) ratio improved to 3.25% at the end of the reporting period. Gross slippages, which indicate fresh additions to bad loans, reduced to INR 1,660 crore from INR 2,567 crore in the year-ago quarter, reflecting better credit quality.
On the Reserve Bank of India's recently opened Foreign Currency Non-Resident (Bank) [FCNR(B)] deposit window, Anand said the bank expects to mobilise deposits broadly in line with its existing market share of around 3.6% in FCNR deposits. However, he did not disclose any specific mobilisation target or the pricing strategy the bank may adopt.
The latest quarterly results indicate that IndusInd Bank is gradually recovering from the challenges it faced over the past year, with improvements visible in profitability, provisioning levels and asset quality, even as the bank continues to focus on strengthening growth across its core businesses.
Source PTI
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