Private sector lender IndusInd Bank reported a significant decline in financial performance for the third quarter of FY26 (ended 31 December 2025), reflecting ongoing headwinds in the banking sector. The bank’s net profit plunged sharply on a year‑on‑year (YoY) basis, while core interest income also weakened amid elevated provisions and cautious balance sheet management.
On a consolidated basis, IndusInd Bank posted a net profit of ₹128 crore in Q3, down nearly 91 per cent compared with ₹1,402 crore in the year‑ago quarter. Standalone profit after tax (PAT) fell 88.5 per cent to ₹161 crore, broadly in line with market estimates.
The bank’s Net Interest Income (NII), a key driver of bank earnings, contracted approximately 13 per cent YoY to around ₹4,562 crore, reflecting slower loan growth and margin pressures. However, NII showed a modest sequential improvement of about 3 per cent over the previous quarter. Net interest margins (NIMs) inched up slightly to 3.52 per cent from 3.32 per cent in Q2 FY26, indicating some stabilization in core lending spreads.
Fee and other non‑interest income also weakened, with total other income falling to ₹1,707 crore from ₹2,355 crore a year earlier, further compressing overall revenue. Pre‑Provision Operating Profit (PPOP) declined around 37 per cent YoY to ₹2,270 crore.
Asset quality remained under watch. Gross non‑performing assets (NPAs) increased to 3.56 per cent of gross advances, up from 2.25 per cent a year ago, while net NPAs rose to 1.04 per cent. The provision coverage ratio remained healthy at around 72 per cent, reflecting coverage against stressed loans.
On the balance sheet, total deposits and advances contracted versus the prior year, evidencing a cautious approach to growth.
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