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IndusInd Bank Reports 39% Drop in Q3 Profit Amid Rising Bad Loans
Profit Decline
IndusInd Bank posted a net profit of ₹14.01 billion ($161.89 million) for the quarter ending December 31, marking a 39% year-on-year decline. This figure was slightly below analysts’ expectations of ₹14.11 billion, according to LSEG data.
Higher Loan Loss Provisions
The bank’s provisions and contingencies surged by 87% to ₹17.44 billion, reflecting increased stress in its loan portfolio.
Deteriorating Asset Quality
- The gross non-performing assets (NPA) ratio rose to 2.25% from 2.11% in the previous quarter and 1.92% a year ago.
- NPAs in the microfinance loan segment increased to ₹24.32 billion from ₹22.59 billion in the prior quarter.
- The microfinance segment accounts for 9% of the bank’s total loans.
Impact on Net Interest Income
Net interest income, which represents the difference between interest earned and interest paid, declined to ₹52.28 billion from ₹52.96 billion a year ago.
Loan and Deposit Growth
- The bank’s total loans grew by 12% year-on-year.
- Deposits increased by 11% over the same period.
Industry Trends
Other major private lenders, including Kotak Mahindra Bank and Axis Bank, also reported sharp increases in provisions for the quarter due to rising bad loans, particularly in unsecured lending and microfinance.
IndusInd Bank had already flagged rising delinquencies in its microfinance loan book in the second quarter, indicating continued stress in this segment.
“IndusInd Bank Reports 39% Drop in Q3 Profit Amid Rising Bad Loans”