IndusInd Bank staged a comeback in the first quarter of fiscal 2026, posting a net profit of ₹604 crores after navigating through previous quarter challenges, the Mumbai-based private sector lender announced Monday.
The results mark a significant turnaround for the bank, which has been working through operational issues and leadership transitions. However, profitability came at a cost, with net interest margins compressing to 3.46% from 4.25% in the same quarter last year—a 79 basis point decline that reflects intense competitive pressure in the banking sector.
Margin Squeeze Hits Revenue
Net interest income, the bread and butter of banking operations, dropped to ₹4,640 crores from ₹5,408 crores year-over-year, while fee income also declined to ₹2,157 crores from ₹2,442 crores. The yield on assets fell to 9.15% from 9.87%, even as the cost of funds edged up slightly to 5.69%.
“The Bank has delivered clean and profitable Q1 results, marking a robust recovery from the challenges of the previous quarter,” said Chairman Sunil Mehta, emphasizing the lender’s focus on operational controls and governance improvements.
Asset Quality Concerns Persist
Asset quality showed some deterioration with gross NPAs rising to 3.64% from 3.13% in the previous quarter, while net NPAs increased to 1.12% from 0.95%. The provision coverage ratio remained stable at 70%, providing some cushion against potential losses.
The bank’s balance sheet expanded modestly with total assets at ₹5.4 lakh crores, up 2% year-over-year. Deposits remained largely flat at ₹3.97 lakh crores, while advances contracted to ₹3.34 lakh crores from ₹3.48 lakh crores the previous year.
Capital Position Remains Robust
Despite the challenges, IndusInd Bank maintains a healthy capital position with a CRAR of 16.63%, well above regulatory requirements. The bank’s liquidity coverage ratio of 141% also provides comfort during uncertain times.
The lender continues expanding its footprint with 3,110 branches and 3,052 ATMs serving approximately 42 million customers. Management emphasized their “One IndusInd” integration strategy while working through leadership succession plans with regulatory approval pending.
