IndusInd Bank Q2 Results: A Shift to Losses and Declining NII
IndusInd Bank has reported a net loss of Rs 437 crore for the second quarter of FY26, a stark contrast to the net profit of Rs 1,331 crore from the same period last year. This disappointing turn is accompanied by a notable 17.6% decline in Net Interest Income (NII), which fell to Rs 4,409 crore compared to Rs 5,347 crore in Q2 FY25.
Key Financial Metrics Highlighting the Shift
The bank’s net interest margin (NIM) also took a hit, dropping to 3.32% for Q2 FY26 from 4.08% a year earlier. In a press release, IndusInd Bank detailed that its fee and other income fell to Rs 1,651 crore from Rs 2,185 crore in Q2 FY25. The yield on assets stood at 8.75%, down from 9.58% in the previous year, while the cost of funds improved slightly to 5.43% from 5.54%.
Operating expenses rose marginally to Rs 4,013 crore, up from Rs 3,932 crore last year. The total expenditure, which includes both interest and operating expenses, was recorded at Rs 11,212 crore, slightly declining from Rs 11,271 crore in the same quarter last year.
The bank’s balance sheet has significantly contracted, totaling Rs 5,27,490 crore as of September 30, 2025, compared to Rs 5,43,407 crore a year prior. Deposits decreased to Rs 3,89,600 crore from Rs 4,12,397 crore, signaling possible liquidity concerns.
Asset Quality and Provisions
Despite the losses, asset quality displayed some stability. The gross NPA ratio improved marginally to 3.60% of gross advances, down from 3.64% as of June 30, 2025. Net NPA also saw an improvement to 1.04%, compared to 1.12% in the previous quarter. The bank’s Provision Coverage Ratio rose to 72%, though provisions increased to Rs 2,631 crore in Q2 FY26, up from Rs 1,820 crore in the previous year.
The Total Capital Adequacy Ratio, adhering to Basel III norms, stood at 17.10%, an increase from 16.51% a year earlier, indicating a stronger capital position amid challenging conditions.
In summary, while IndusInd Bank’s Q2 results reflect significant challenges, the management believes that consolidating the balance sheet and prudent provisioning will ultimately bolster long-term stability. Rajiv Anand, the MD and CEO, noted that these measures aim to enhance the bank’s financial health, paving the way for the normalization of profitability in the coming quarters. The path ahead remains challenging, but IndusInd Bank’s focus on strengthening its foundation may yield positive outcomes in the long run.