The impact was seen across key financial metrics. The Net Interest Margin halved to 2.25%, while Return on Assets and Equity turned negative.
IndusInd Bank’s key financial metrics have gone off-kilter after its provisions and contingencies shot up 165 per cent year-on-year in the fourth quarter (Q4FY25) amid serious accounting discrepancies.
Even as India’s fifth largest private sector bank plunged into a net loss of ₹2,329 crore in Q4FY25 against a net profit of ₹2,349 crore in the year-ago quarter in the wake of provisions and contingencies soaring to ₹2,522 crore (₹950 crore in Q4FY24), net interest margin, return on assets, return on equity, cost-to-income ratio, and net non-performing assets were adversely impacted.
Net interest margin (NIM) declined to 2.25 per cent in Q4FY25 from 4.26 per cent in Q4FY24. Return on assets as well as return on equity turned negative at 1.74 per cent (1.90 per cent) and 14.12 per cent (15.23 per cent).
Cost to income ratio and net non-performing assets rose to 113.07 per cent (48.23 per cent) and 0.95 per cent (0.57 per cent).
Interestingly, the bank’s cash balances with RBI jumped 175 per cent to ₹51,006 crore (₹18,561 crore) and balances with banks declined 54 per cent to ₹8,369 crore (₹18,347 crore).
The bank’s capital-to-risk-weighted assets ratio declined to 16.24 per cent from 16.46 per cent.
In addition to the already known accounting discrepancies, the bank’s auditors noted that its internal financial review identified other instances of incorrect accounting that required rectification and were rectified during the quarter and year ending March 31, 2025.
These include an interest payment of ₹99.97 crore on certain borrowing instruments not recognised in the Profit & Loss Account in earlier years and a provision of ₹133.25 crore in respect of balances in Other Assets that are not expected to be realised.
Published on May 21, 2025
