IndusInd Bank reported a net loss of ₹444.8 crore for the July–September quarter (Q2 FY26). This was a big miss—analysts expected a profit of ₹309 crore. Last year in the same quarter, the bank made a profit of ₹1,325.5 crore.
Reasons for the Loss
- Lower Income from Lending (Net Interest Income): the NII dropped by 17.5% year-on-year, falling to ₹4,409 crore(from ₹5,347 crore last year). This is the money the bank earns from loans after paying interest on deposits. It also highlights the pressure on its core banking operations despite the overall rise in net profit driven by a one-time gain.
- Lower Fee & Other Income: Fell to ₹1,651 crore (from ₹2,185 crore last year). This includes income from services like ATM fees, account charges, etc.
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Net Interest Margin (NIM): Net Interest Margin dropped to 3.32% from 4.08% last year. NIM shows how profitably a bank lends money. Lower NIM = Less profit.
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Provisions and Write-offs Increased –IDBI Bank’s provisions rose to ₹2,622 crore, up from ₹1,820 crore last year. This includes ₹1,940 crore in loan write-offs and ₹872 crore more than the previous quarter. A big reason is trouble in the microfinance segment (small loans to low-income borrowers). The bank has tightened rules and slowed lending in this area, but still set aside more money to cover possible future losses.
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Loans and Deposits Shrinking- Deposits fell to ₹3.89 lakh crore (from ₹4.12 lakh crore last year) while Loans (Advances) dropped to ₹3.26 lakh crore (from ₹3.57 lakh crore last year).
Some positive news for IDBI:
- Asset Quality Improved Slightly: Bad loans (Gross NPA) dropped to 3.6% of total loans (down from 3.64% last quarter). Net NPA fell to 1.04% (from 1.12%).
- Provision Coverage Ratio (PCR) improved to 71.81%, this means the bank has set aside more money to cover bad loans.
- Capital Adequacy Ratio (CRAR) is now 17.1%, showing the bank is financially strong enough to absorb losses.
- Liquidity Coverage Ratio (LCR) was 132%, meaning the bank has enough liquid assets (cash, bonds, etc.) to meet short-term obligations.
Rajiv Anand (MD & CEO) of IDBI Bank said: we are strengthening our balance sheet by reducing risky lending (like microfinance), cutting back on large deposits, and increasing provisions. Our core operating profit remains steady.”
IndusInd Bank reported a surprise loss due to lower income and higher provisions, but is taking steps to clean up its loan book and strengthen its financial position.
