Private sector lender IndusInd Bank on May 21 reported a net loss of Rs 2328.92 crore in the fourth quarter of the financial year 2024-25, much higher than the analyst estimate of Rs 304 crore met loss polled by Moneycontrol, compared to a net profit of Rs 2,349 crore in Q4FY24.
This is first earnings report by the lender after it uncovered major accounting discrepancies and has been under scrutiny due to multiple audits and top-level resignations.
Earnings Fineprint
The bank's Q4FY25 Net Interest Income (NII) came in at Rs 3,048.3 crore, and provisions stood at Rs 2522.08 crore compared to Rs 1,743.63 crore a quarter ago.
The Gross Non-performing Asset (NPA) of the bank stood at 3.13 percent in Q4FY25 as compared to 2.25 percent in Q3FY25 and 1.92 percent in Q4FY24.
The Net NPA ratio stood at 0.95 percent for the March quarter as compared to 0.68 percent in a quarter ago period and 0.57 percent in a year ago period.
The bank recently disclosed that Rs 674 crore had been mistakenly booked as interest income across three quarters of FY25. This follows its earlier admission on March 10 about irregularities in its derivative portfolio, expected to impact 2.35 percent of its net worth as of December 31, 2024.
Suspicion of Fraud
IndusInd Bank has said on May 21 that its Board suspects a fraud involving certain employees, who played a significant role in the lender's accounting and financial reporting, and has directed all necessary actions to be taken under applicable laws, including reporting the matter to regulatory authorities and investigative agencies.
The internal audit committee said, "On the basis of revaluation of the findings, there is likely involvement of senior bank officials including former KMP in overriding internal control across functions and concealment from the board and statutory auditors of the wrongful accounting practices adopted over such period if time, as indicated in the respective investigation and review reports."
Update on New CEO
During the earnings call with analysts, IndusInd Bank said the board is in advance stages regarding the selection process, and will submit the recommendations of CEO names to the RBI by June 30.
What the Chairman Said
IndusInd Bank's chairman Sunil Mehta said the bank has taken extra steps which he believes should help avoiding such incidents in the future. The lender is also congnizant of the need to improve the governance culture, said Mehta, and the board is approaching all these aspects with utmost seriousness.
This is being updated
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