- 22 May 2025
- ICICIdirect Research
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INDUSIND BANK REPORTED A SIGNIFICANTLY WEAK PERFORMANCE IN Q4FY25
INDUSINDBK - 820 Change: 3.30 (0.40 %)News: IndusInd Bank reported a significantly weak performance in Q4FY25, as it absorbed the full impact of derivative losses, accounting adjustments and elevated stress in the microfinance portfolio—all of which were taken into account during this challenging quarter. Advances declined 6% QoQ (up 0.5% YoY) to ₹3,45,019 crore, led by a sharp sequential dip in corporate loans. On the liabilities side, deposits remained flat QoQ (up 7% YoY) at ₹4,10,862 crore, with CASA falling 6% QoQ (-7% YoY) to ₹1,34,789 crore, pulling CASA ratio down to 33%. NII dropped sharply by 42% QoQ (-43% YoY) to ₹3,048 crore, impacted due to reversal of interest income and cost pertaining to higher liquidity, driving NIM contraction of 168 bps QoQ to 2.25%. Other income also plunged 70% QoQ due to one-off ₹1,960 crore hit from derivative misstatement. Elevated slippages drove provisions higher by 45% QoQ to ₹2,522 crore, resulting in a net loss of ₹2,329 crore. Recognition of stress in MFI portfolio led to higher slippages and rise in GNPA/NNPA by 88/27 bps QoQ to 3.13% and 0.95% respectively.
View: Amid a turbulent quarter marked by governance breakdowns and audit-triggered clean-up, the bank has absorbed all legacy issues brought to the board, though microfinance stress may linger for another six months. Elevated provisions and reversals in fee and interest income due to past misstatements significantly weighed on profitability. Appointment of new management is awaited, with board confident to track regulatory timelines.
Impact: Negative