IndusInd Bank Q4 update: Net advances decline QoQ, deposits show modest growth

According to interim data, private lender IndusInd Bank’s term deposit and low-cost deposit growth fell by two percentage points in the March quarter compared to the December 2024 quarter. This reduction is most likely the result of deposit withdrawals following the bank’s discovery of accounting errors relating to currency derivatives. In an exchange filing, the bank claimed that deposits in its current and savings accounts increased by 32.8% as of the end of March 2025, compared to 34.9% in December 2024.

Analysts estimate that retail and small business depositors withdrew approximately Rs 3,550 crore during the March quarter. Provisional statistics revealed that retail deposits and deposits from small businesses. The bank’s total deposits increased by 0.4% to Rs 4.11 lakh crore as of March 31, 2025. Total deposits rose 6.8% yearly, compared to 11% growth in the December quarter.

To fight the deposit losses, IndusInd Bank raised more than six times its average amount from certificates of deposit, securing Rs 16,550 crore in March 2025, compared to Rs 2,500 crore in the same month last year. On March 7, the Reserve Bank of India (RBI) granted a one-year extension of Sumant Kathpalia’s tenure as CEO. Kathpalia’s tenure, originally scheduled to end on March 24, 2025, will finish on March 23, 2026.

On March 10, the bank announced the start of an internal examination of a section of its derivative portfolio after discovering anomalies in account balances. The bank believes these disparities might reduce its net value by around 2.35%, with analysts forecasting a loss of nearly Rs 1,600 crore. The lender’s shares plunged more than 27% the day after the news and have already fallen more than 50% year to date. IndusInd Bank’s stock is now trading at Rs 682 each.

On March 21, IndusInd Bank announced the engagement of an independent consultancy to perform a full audit of its derivatives portfolio and identify managerial responsibility for the issue. Meanwhile, its advances growth declined 5.2% sequentially, bringing the total loan book to Rs 3.48 lakh billion by the end of the March quarter. Corporate book led the fall, contracting by more than 15% sequentially. Every year, the corporate book fell approximately 5%. According to preliminary data, consumer loans increased by 6.3% year on year and 3.4% quarter on quarter.