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IndusInd Bank Q4 Results: Net loss of ₹2,328 crore a first in 20 years as accounting issues, MFI stress weigh

Published on: May 21, 2025, 7:11 pm

Source: CNBCTV18

Mumbai-based private lender IndusInd Bank Ltd. reported a net loss of ₹2,328 crore for the January-March period as accounting issues reported earlier and stress in the microfinance portfolio led to the balance sheet taking a hit. A CNBC-TV18 poll was working with a figure of ₹514 crore net loss. The results were reported after market hours on Wednesday, May 21.





This is the first instance in 20 years that IndusInd Bank has reported a quarterly net loss. The last instance of a loss reported by IndusInd Bank was back in the fourth quarter of financial year 2006, when Bhaskar Ghose was the lender's CEO. The only other instance of the lender reporting a loss in its trading history was back in March 2001.





IndusInd's Net Interest Income (NII) or core income declined by 43.4% from the same quarter last year to ₹3,048 crore, which is lower with the CNBC-TV18 poll of ₹4,762.4 crore.





Asset quality for the lender deteriorated on a sequential basis, with Gross NPA at 3.13% from 2.25% in the December quarter, while net NPA for the quarter stood at 0.95% from 0.68% in the previous quarter.





In a separate filing, IndusInd Bank stated that the Internal Audit Department submitted a report on May 20, where an amount of ₹172.58 crore was incorrectly recorded as fee income in the Microfinance business over three quarters ending December 31, 2024 and was reversed in the fourth quarter.





"Based on review of all these reports, the board suspects the occurrence of fraud against the bank and the involvement therein of certain employees having a significant role in the accounting and financial reporting of the bank," the statement from the bank said.





In its business update shared earlier, IndusInd Bank reported its weakest business momentum in at least five years.





IndusInd Bank's advances grew by 1.3% during the January-March period on a year-on-year basis, which was the weakest growth in 17 quarters. On the sequential basis, loan growth declined by 5.2%, which was the biggest decline in 37 quarters or more.





Deposits grew by 6.8% during the March quarter, in comparison to the year-ago period to ₹4.11 lakh crore. This was the weakest deposit growth reported by the lender in the last 19 quarters.





IndusInd Bank is currently without an MD & CEO as Sumant Kathpalia, stepped down from his position earlier this month in light of the fallout post the derivative accounting discrepancies coming to light.





On May 8, IndusInd's Internal Audit Department submitted a report on MFI discrepancies, where the lender had incorrectly recorded interest of ₹674 crore over three quarters, which was fully reversed as of January 10 this year. There were also unsubstantiated balances worth ₹595 crore in the bank's "other assets."





"The Board is taking necessary steps to strengthen internal controls, fix accountability of the persons responsible for these lapses and will take action as appropriate," the lender had said.





Shares of IndusInd Bank ended 2% lower on Wednesday ahead of the earnings announcement at ₹766.8.

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