IndusInd Bank Q1 profit jumps 47% as bad loans improve, provisions fall; beats estimates

Private sector lender IndusInd Bank Ltd on Wednesday (July 22) reported a 46.5% year-on-year increase in net profit for the first quarter. The bank posted a net profit of ₹1,002.5 crore, compared with the CNBC-TV18 poll estimate of ₹725 crore. The lender had reported a net profit of ₹684 crore in the corresponding quarter last year.

Net interest income (NII), the difference between interest earned and interest paid, rose 1% year-on-year to ₹4,685 crore, higher than the CNBC-TV18 poll estimate of ₹4,460 crore and up from ₹4,640 crore a year ago.

Net interest margin (NIM) improved to 3.57% in the June quarter from 3.46% in the corresponding quarter of the previous year.

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Gross non-performing assets (GNPA) stood at 3.25% of gross advances at the end of June, improving from 3.43% in the March quarter. Net non-performing assets (NNPA) eased to 0.95% from 1% sequentially.

Provisions declined to ₹1,340 crore, compared with ₹1,484 crore in the previous quarter and ₹1,738 crore in the year-ago period. The bank separately reported provisions and contingencies, excluding tax, at ₹1,384 crore, compared with ₹1,760 crore in the corresponding quarter last year.

Total income from operations during the quarter stood at ₹6,471 crore, compared with ₹6,797 crore in the year-ago period.

Fee and other income declined to ₹1,787 crore from ₹2,157 crore a year ago.

Pre-provision operating profit (PPOP) rose to ₹2,773 crore from ₹2,567 crore in the corresponding quarter of the previous year, while operating expenses fell to ₹3,698 crore from ₹4,229 crore.

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Yield on assets stood at 8.62% during the quarter, compared with 9.15% a year ago. Cost of funds improved to 5.05% from 5.69% in the corresponding period last year.

As of June 30, 2026, the bank's balance sheet size increased to ₹5,54,926 crore from ₹5,39,552 crore a year earlier.

Deposits rose to ₹4,14,766 crore from ₹3,97,144 crore a year ago. Current account and savings account (CASA) deposits stood at ₹1,22,060 crore, including ₹34,620 crore in current accounts and ₹87,440 crore in savings accounts. CASA deposits accounted for 29.43% of total deposits.

Retail deposits, as measured under the Liquidity Coverage Ratio (LCR) framework, increased to ₹1,90,166 crore from ₹1,82,898 crore as of March 31, 2026.

Advances stood at ₹3,26,274 crore as of June 30, 2026, compared with ₹3,33,694 crore a year ago. The provision coverage ratio improved to 71.42%, compared with 70% in the corresponding period last year.

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The bank's total capital adequacy ratio (CRAR) under Basel III stood at 17.15% at the end of June, compared with 16.63% a year ago. Tier-I capital adequacy ratio improved to 16.10% from 15.48%, while risk-weighted assets stood at ₹4,06,618 crore.

Net worth increased to ₹64,798 crore from ₹62,961 crore a year earlier. The average liquidity coverage ratio for the quarter stood at 127%, compared with 141% in the corresponding quarter of the previous year.

Rajiv Anand, the MD and CEO, IndusInd Bank said, "During Q1FY27, we continued to execute our strategic priorities with an emphasis on disciplined growth, balance sheet resilience and franchise quality. Supported by an experienced leadership team and sharper execution capabilities, we are advancing our growth agenda while maintaining prudent risk management.

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We are building a diversified portfolio across retail, SME and rural businesses, including expanding the rural franchise beyond microfinance. At the same time, our investments in technology and AI-led capabilities are enhancing customer experience and overall productivity, strengthening our ability to deliver sustainable growth"

While geopolitical developments continue to shape the global environment, India’s structural growth drivers remain firmly in place. The Bank delivered a Pre-Provision Operating Profit of ₹2,773 crore and Profit After Tax of ₹ 1,037 crore, supported by capital adequacy of 17.15 % and a liquidity coverage ratio of 127%. Together, these priorities position us well to create sustainable value over the long term."

As of June 30, 2026, IndusInd Bank's distribution network comprised 3,137 branches and banking outlets and 2,853 on-site and offsite ATMs, compared with 3,110 branches and banking outlets and 3,052 ATMs a year earlier. The bank's client base stood at approximately 42 million.

Shares of IIFL Finance Ltd ended at ₹566.55, down by ₹5.55, or 0.97%, on the BSE.