Mumbai, 21 October 2025 – IndusInd Bank has reported a net loss of ₹437 crore for the second quarter of FY26, marking a major setback compared to a net profit of ₹1,331 crore in the same quarter last year. The bank’s results were affected by falling core income, lower margins, and higher provisions for bad loans.
Key Financial Highlights
- Net Interest Income (NII): Fell around 17–18% year-on-year to ₹4,409 crore from ₹5,347 crore.
- Net Interest Margin (NIM): Declined to 3.32% from 4.08% a year earlier, reflecting reduced profitability from lending operations.
- Provisions: Rose sharply to about ₹2,631 crore, up nearly 45% from the previous year, mainly due to stress in the microfinance portfolio.
- Other Income: Dropped around 24% year-on-year, signalling weaker performance in non-interest areas like fees and commissions.
- Deposits: Declined by roughly 6% to ₹3.89 lakh crore from ₹4.12 lakh crore last year.
- Advances: Down around 9% to ₹3.25 lakh crore compared to ₹3.57 lakh crore in the same quarter last year.
- Gross NPA Ratio: Stood at around 3.6%, showing a slight rise in bad loans.
Reasons Behind the Loss
The primary reasons for the poor quarterly performance include:
- Falling Core Income: The drop in interest income and fee-based earnings directly impacted profitability.
- Higher Provisions: The bank made large provisions for its microfinance business, which saw increased stress.
- Margin Pressure: Reduced lending spreads and higher funding costs affected the net interest margin.
Management’s View
The management stated that while this quarter’s performance reflects the pain from stressed assets, the bank has taken proactive steps to clean its books. Increased provisioning, tighter risk management, and a shift toward more stable retail and corporate lending are expected to strengthen the balance sheet in coming quarters.
Outlook
IndusInd Bank’s immediate focus will be on:
- Restoring growth in deposits and advances,
- Improving margin performance, and
- Reducing credit stress in the microfinance segment.
Analysts believe that while the bank faces short-term challenges, its long-term prospects remain tied to its ability to control bad loans and stabilise margins.
Summary Table
| Metric | Q2 FY26 | Q2 FY25 | Change |
|---|---|---|---|
| Net Profit / (Loss) | ₹ –437 crore | ₹ 1,331 crore | From profit to loss |
| Net Interest Income (NII) | ₹ 4,409 crore | ₹ 5,347 crore | ↓ ~17–18% |
| Net Interest Margin (NIM) | 3.32% | 4.08% | Margin pressure |
| Provisions & Contingencies | ₹ 2,631 crore | ₹ 1,820 crore | ↑ ~45% |
| Gross NPA Ratio | 3.60% | 2.11% | Slight increase |
| Deposits | ₹ 3.89 lakh crore | ₹ 4.12 lakh crore | ↓ ~6% |
| Advances | ₹ 3.25 lakh crore | ₹ 3.57 lakh crore | ↓ ~9% |
Conclusion
IndusInd Bank’s Q2 FY26 results highlight a challenging quarter marked by lower income and higher provisions. The ₹437 crore loss underscores the impact of rising credit costs and margin compression. However, the bank’s efforts to strengthen its balance sheet and diversify lending may help it regain stability in the upcoming quarters.
