IndusInd Bank Struggles in Q1: Deposits and Advances Take a Hit
Private sector lender IndusInd Bank reported a 3.9% year-on-year (YoY) decline in net advances to ₹3,34,477 crore for the quarter ending June 30, 2025 (Q1 FY26). This marks a significant drop from ₹3,47,898 crore reported in the same quarter last year (Q1 FY25).
Mumbai: Private sector lender IndusInd Bank reported a 3.9% year-on-year (YoY) decline in net advances to ₹3,34,477 crore for the quarter ending June 30, 2025 (Q1 FY26). This marks a significant drop from ₹3,47,898 crore reported in the same quarter last year (Q1 FY25).
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Corporate Lending Weakens, Drives Overall Decline in Advances
The fall in net advances was primarily driven by a 14.4% YoY slump in corporate banking, which also saw a 6.2% drop from the previous quarter (Q4 FY25). On a sequential basis, overall advances fell 3.1%, down from ₹3,45,019 crore in the March quarter.
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Consumer Segment Grows YoY, But Declines Sequentially
The consumer banking segment posted a modest 4.8% YoY growth, indicating some resilience. However, even this segment reported a 0.9% sequential decline, contributing to the overall drop in advances.
Deposits Also Take a Hit; CASA Ratio Continues to Slip
Total deposits came in at ₹3,97,233 crore, registering a 0.3% decline YoY and a 3.3% fall compared to the March 2025 quarter. The CASA (Current Account Savings Account) ratio fell to 31.49%, down from:
- 32.81% in March 2025 (Q4 FY25)
- 36.67% in June 2024 (Q1 FY25)
Retail and small business deposits also declined marginally to ₹1,84,709 crore from ₹1,85,133 crore in the previous quarter.
Liquidity Coverage Ratio (LCR) Remains Strong
Despite the weak loan and deposit performance, IndusInd Bank’s average Liquidity Coverage Ratio (LCR) remained healthy at 141.27% for the April-June quarter. As of June 30, the daily LCR stood at 145.26%, showing robust liquidity management amid financial stress.
IndusInd Bank Still Reeling from Q4 FY25 Loss
This quarter’s soft performance follows the bank’s historic net loss of ₹2,328 crore in Q4 FY25, which was its first quarterly loss in nearly 20 years. The loss was attributed to:
- Accounting irregularities
- Stress in the microfinance portfolio
The last time the bank reported a loss was in Q4 FY2006 under CEO Bhaskar Ghose, with the only other loss occurring in March 2001.
The Q1 FY26 results reflect ongoing financial pressure on IndusInd Bank, particularly from the corporate segment and declining low-cost deposits. With the lingering impact of Q4 losses and shrinking loan book, the bank may need to strategically realign its lending and deposit mobilization efforts in the upcoming quarters.
