IndusInd Bank shares drop over 5%, hit 52-week low, here's why

The bank in a stock exchange filing post market hours on Friday said, "Reserve Bank of India, vide its letter dated March 6, 2025, has conveyed its approval for re-appointment of Sumant Kathpalia as MD & CEO of the bank for a further period of one year with effect from March 24, 2025 till March 23, 2026."

This is the second time that the RBI approved a shorter tenure for Kathpalia instead of a full three-year term.

Kathpalia, who has led the bank since March 2020, was previously granted a two-year extension by the RBI in March 2023..

This isn’t the first time the RBI has opted for a shorter tenure extension for private sector bank chiefs. In 2021, RBL Bank’s Board had sought a three-year extension for MD & CEO Vishwavir Ahuja, but the regulator approved just one year. The bank later appointed former Indian Overseas Bank chief R Subramaniakumar as his successor.

Similarly, in 2018, the RBI declined to extend the tenure of YES Bank’s co-founder and CEO, Rana Kapoor. He was eventually replaced by Ravneet Gill from Deutsche Bank in 2019.

IndusInd Bank reported weak set of earnings in quarter ended December 2024 as its net profit declined 39% to ₹140 crore from ₹230 crore in the same period last year. Its net interest income or the difference between interest earned on loans and expended on deposits rose 11% to ₹12,800.77 crore as against ₹11,572.25 crore in the year-ago period.

Sharp decline in profitability came after the bank increased provisions for bad loans to ₹1,743.63 crore from ₹969 crore last year.

The bank's asset quality slowed a deterioration as its gross non-performing assets (NPAs) as a percentage of total advances jumped to 2.25% from 1.92% and its net NPAs rose to 0.68% at the end of December quarter 0.57% during the same period last year.

As of 10:00 am, IndusInd Bank shares traded 3.18% lower at ₹907, underperforming the NIFTY50 index which was up 0.5%.