IndusInd Bank Q2 result: Lender reports net loss of ₹437 crore; NII drops 17.5% YoY

The bank had reported a net profit of ₹604 crore in the previous quarter (Q1 FY26).

Its net interest income (NII) for Q2 FY26 dropped 17.5% year-on-year (YoY) to ₹4,409 crore as against ₹5,347 crore in the corresponding quarter of FY25.

For Q2 FY6, the net interest margin (NIM) stood at 3.32% as compared to 4.08% for Q2 FY25.

As of September 30, 2025, the lender’s gross NPA stood at 3.60% of gross advances, slightly lower than the 3.64% recorded on June 30, 2025. Net NPA also improved to 1.04% of net advances, down from 1.12% at the end of the previous quarter.

“During Q2FY26, the Bank consolidated its balance sheet by letting go of wholesale deposits and being cautious on microfinance disbursements. Nevertheless, our core pre-provision operating profit at ₹1,940 crores remained stable QoQ. Our asset quality trends have been stable in all core businesses except in microfinance, wherein the industry is facing cyclical pressures,” said Rajiv Anand, the MD and CEO of IndusInd Bank.

“The Bank accelerated write-offs as well as increased provisions on microfinance as a prudent measure. While this has resulted in the Bank showing a loss in Q2, we believe this strengthens the balance sheet and fast-tracks normalisation of underlying profitability,” Anand added.

IndusInd Bank’s Provision Coverage Ratio improved to 72% as of September 30, 2025. Provisions and contingencies for the quarter stood at ₹2,631 crore, up from ₹1,820 crore in the same quarter of the previous year. Total loan-related provisions as of September 30, 2025, amounted to ₹10,443 crore, representing 3.20% of the bank’s loan book.

For Q2, total deposits stood at ₹3,89,600 crore, down from ₹4,12,397 crore as of September 30, 2024. CASA deposits were ₹1,19,771 crore, with current account deposits at ₹31,916 crore and savings account deposits at ₹87,854 crore, making up 31% of total deposits for the quarter.

Advances as of September 30, 2025, were ₹3,25,881 crore, compared with ₹3,57,159 crore in the previous year.

As per Basel III guidelines, the private lender’s total Capital Adequacy Ratio (excluding half-yearly profits) stood at 17.10% in Q2 FY26, increasing from 16.51% a year earlier. Tier-1 CRAR (excluding half-yearly profits) improved to 15.88% from 15.21% over the same period. Risk-weighted assets decreased to ₹3,98,256 crore from ₹4,20,519 crore a year ago.

Half-year earnings update

For the half year ended September 30, 2025, IndusInd Bank’s net interest income (NII) declined 16% year-on-year to ₹9,049 crore, down from ₹10,755 crore in the corresponding period of the previous year. Total income, including interest and fee income, fell to ₹27,681 crore from ₹29,860 crore a year earlier, while operating expenses rose to ₹8,243 crore from ₹7,830 crore during the same period.

The bank reported a net profit of ₹167 crore for the half year ended September 30, 2025, a significant drop from ₹3,502 crore in the corresponding previous half year.

“I remain optimistic about ongoing economic recovery driven by the prudent fiscal and monetary measures. We will work towards positioning the Bank to participate in the recovery as it unfolds. Our focus is on realising the full potential of the Bank by leveraging our capabilities, scaling our strengths, improving in areas where we can do better and unlocking new areas of value creation,” Anand further said.