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Informist, Saturday, Oct. 18, 2025

 

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--IndusInd Bank: Microfinance will continue to be crucial part of bank's ops 
--CONTEXT: Comments from IndusInd Bank mgmt in post-earnings analyst concall 
--IndusInd Bank: See huge opportunity to grow retail business 
--IndusInd Bank: To scale up home loans despite cost of funds disadvantage 
--IndusInd Bank: Consciously cutting down on CDs, bulk deposits 
--IndusInd Bank: Made prudential provisions, write-offs for microfin book 
--IndusInd Bank: Aim to formalise leadership structure, fill gaps 
--IndusInd Bank: Will announce medium-term strategy in coming months 
--IndusInd Bank: Slippages stabilising, need to remain cautious 
--IndusInd Bank: New head of human resources, digital banking to join soon 
--IndusInd Bank:Have established staff accountability post derivatives issue 
 

 

By Kabir Sharma and Madhu Kumar

 

MUMBAI – IndusInd Bank has established staff accountability to prevent the repetition of recent accounting lapses, the management of the bank said in a post-earnings call with analysts. "...The bank is fully cooperating with law enforcement agencies as we go forward. Based on all the investigations that have been done, staff accountability has been established and staff action has been established. Some people have been asked to go, some people have been docked," Rajiv Anand, managing director and chief executive officer of the bank, said.

 

The bank, which declared its earnings on Saturday, reported a net loss of INR 4.45 billion for the September quarter against expectations of a net profit of INR 5.83 billion. It failed to hold on to the positives from the previous quarter, when it had reported a net profit of INR 6.84 billion for the first time after taking a hit in the March quarter due to discrepancies in its derivatives portfolio accounting.

 

Microfinance will continue to be an integral part of the bank's approach, especially meeting its financial inclusion and priority sector ambitions, the management said. "We have resumed disbursements in the corporate bank which were tactically slowed in the earlier couple of quarters for efficient balance sheet management," Anand said. However, the bank continues to be cautious on the microfinance business and has taken several steps that would help the bank weather subsequent cycles, it said.

 

For the troubles faced by the microfinance portfolio, the bank has made prudential provisions and accelerated the write-offs. "We have seen higher slippages in this portfolio, so we did an accelerated write-off this quarter, and we have potentially upped our PCR (provision coverage ratio) on this portfolio and the overall PCR for the bank," Anand said. The slippages in the portfolio have stabilised, however, the bank needs to remain cautious going forward, he said.

 

The bank will continue to grow in its main domains, vehicle finance and micro-lending, and sees huge opportunities to grow its retail asset businesses to support its liability franchise. "The unsecured segments too are now poised for cyclical growth. We believe the retail segment will contribute meaningfully to our growth in the future," Anand said. The bank will also look to grow its home loan book despite the cost of funds disadvantage, Anand said.

 

In order to optimise its deposit mix, the bank has exited some wholesale deposits and certificate of deposits while maintaining a healthy liquidity position, it said. "Deposits dropped 1.9%. Of that, 1.2% drop was solely from reduction in CDs, which we are looking to calibrate down," the management said. 

 

After the exits from the bank due to the discrepancies, formalising the leadership structure is a key near-term aim of the bank, the management said. "As we go forward, during the course of the next three months, a new head of HR (human resources), a new head of digital are expected to join. And in the medium-term, there are a few others, senior hires that we are looking at as well," Anand said. 

 

The bank will announce its growth strategy for the medium term in the coming months as the bank makes its way out of the recent controversies, the management said. On Friday, shares of the bank closed at INR 751 on the National Stock Exchange, down 1.6%.  End

 

Edited by Ashish Shirke

 

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