IndusInd Bank Q4 net loss at ₹2,329 cr; Chairman vows action on accounting issues

Fraud-hit IndusInd Bank has reported a consolidated net loss of ₹2,329 crore in the January-March quarter (Q4 FY25) against a net profit of ₹2,349 crore in the corresponding period last year, the company stated via an exchange filing. The bank's Net Interest Income (NII) for the said period stood at ₹3,048 crore, down 43% YoY versus ₹5,376 crore in the year-ago period.

For the full financial year, IndusInd Bank reported Net Interest Income of ₹19,031 crore against ₹20,616 crore. Net profit at ₹2,575 crore for FY25 came in 71% down against ₹8,977 crore for the corresponding year, FY24.

The bank's balance sheet footage as on March 31, 2025, was ₹5,54,107 crore against ₹5,15,094 crore as on March 31, 2024, showing a growth of 8%. The bank's NPA surged in FY25. The Gross NPA was at 3.13% of gross advances as on March 31, 2025, as against 2.25% as on December 31, 2024. Net Non-Performing Assets were 0.95% of net advances as on March 31, 2025, compared to 0.68% as on December 31, 2024.

IndusInd Bank last week informed that it had uncovered accounting discrepancies amounting to ₹1,269 crore following an internal audit. The audit revealed incorrect interest income recording and unsubstantiated balances.

IndusInd Bank today said it has faced multiple material developments since March 25, terming them "unfortunate," while saying it is "determined" to address all issues brought to its attention.

Highlighting the measures taken to understand the root cause of the identified irregularities, ascertain the financial impact, and take corrective actions as well as fix accountability, the private lender says its board has worked in close coordination with the management and all relevant stakeholders.

"An in-depth review of all areas of concern was conducted, internally as well as wherever required, with the help of competent external advisors. The statutory auditors have done substantive checks with wider sample sizes to analyse any anomalies in financial reporting and given an unqualified opinion. A conservative approach has been adopted in financial reporting to ensure the accuracy and robustness of the financial statements," an IndusInd Bank filing says.

The private lender's board says it is in the process of taking necessary steps to assess roles and responsibilities and fix staff accountability as per the extant laws and internal code of conduct in all the identified irregularities.

Sunil Mehta, the Chairman of the Board of Directors, IndusInd Bank, says the Board and the Management acknowledge that the lapses that happened have been "unfortunate" and that the bank board, along with the management, have shown a strong resolve to address all the identified issues. "The learnings from these incidents will be imbibed to reinforce the governance and compliance culture of the organisation. The Bank, at its core, has a profitable business model, and it will pivot towards sustainable growth as we put this episode behind us."

Implications on financial position

IndusInd Bank says it has appropriately accounted for and reflected the impact while finalising the results for the quarter and full financial year ended March 31, 2025. "The Bank’s financials now reflect a full and fair representation of all the concerns brought to its attention."

The bank’s balance sheet remains healthy after absorbing all these impacts with a Capital Adequacy Ratio of 16.24%, Provision Coverage Ratio of 70%, and an average LCR of 118% with excess liquidity of ₹39,600 crore, says IndusInd Bank. It adds that liquidity remains comfortable in the current quarter as well, with an average LCR of 139% in the first half of the quarter.

Leadership transition

IndusInd Bank says its board has started the process for identifying potential CEO candidates and is making speedy progress. Former MD & CEO Sumant Kathpalia had resigned on April 29, 2025, amid the issue of accounting discrepancies related to internal derivative trades at the bank.

"The RBI has advised the Bank to submit proposals for the appointment of the new CEO for RBI’s approval by 30th June 2025. The Board is at an advanced stage in the selection process and is confident that recommendations will be submitted to the RBI well in advance of the timeline. This will provide strong leadership and management stability at the Bank," the bank said today.

In the interim, the Committee of Executives (CoE), with members having over 30 years of experience individually, is entrusted to oversee the operations of the bank under an oversight committee of the board.

The Background

In a stunning revelation on March 10, 2025, IndusInd announced that it had identified discrepancies in the accounting of derivative transactions conducted over the past 5-7 years for hedging its foreign currency borrowings. It admitted to significant discrepancies in its derivative portfolio, resulting in an estimated adverse impact of 2.35% on its net worth. The estimated loss was around ₹1,529.90 crore, based on the bank’s net worth of ₹65,102 crore as of December 2024. 

The bank had clocked a profit of ₹6,628 crore during the nine months of the current fiscal year.