Private sector lender IndusInd Bank has reported a 68% drop in standalone net profit, bringing it down to Rs 684 crore for the quarter ended June 30, 2025. The steep decline was primarily due to a fall in loan disbursements and a rise in provisions for potential bad loans.
The bank’s net interest income (NII) also took a hit, falling 14% year-on-year to Rs 4,640 crore in Q1FY26.
This dip in core income highlights the challenges the bank is facing in its lending operations amid a tighter economic environment.
Performance Better Than Estimates
Despite the headline numbers looking weak, IndusInd Bank’s Q1 performance still managed to beat market expectations.
As per a poll conducted by Moneycontrol, analysts had estimated the bank’s net interest income at Rs 4,279 crore and net profit at Rs 559 crore for the June quarter.
The actual figures of Rs 4,640 crore in NII and Rs 684 crore in profit show that the bank performed better than street forecasts, offering a small silver lining to investors.
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Pressure from Lower Loans & Higher Provisions
The fall in net profit reflects reduced credit growth and an increase in provisions, which are buffers kept aside for loans that might turn bad.
This combination of muted loan growth and rising credit risk is a concern, especially at a time when several banks are already feeling the heat from uncertain economic trends.
IndusInd Bank’s strategy ahead will likely focus on strengthening asset quality and reviving loan growth in the coming quarters.
