Mumbai: Hinduja-promoted lender IndusInd Bank Friday reported a sharp 91% decline in its third-quarter net profit to ₹128 crore, as pockets of assets deteriorated in quality and provisions rose. But the bank swung into profit from a loss of ₹437 crore in the second quarter, after accelerated microloan provisions and the lingering impact of protracted misreporting of derivative trades had battered the bottomline in the three months to September. IndusInd had posted a profit of ₹1,402 crore in the December quarter last year. The lender had made public the potential losses linked to the derivatives misreporting in March last year.

Statutory probes began in the immediate aftermath, felling the erstwhile leadership, including long-standing CEO Sumant Kathpalia.

On Friday, the new MD and CEO Rajiv Anand said the board has now put in place the leadership needed to rebuild credentials for the lender.

“I am very satisfied with the leadership team that we have been able to build,” Anand said. “I am very confident that this will be the foundation for building a significantly better bank as we go forward—not just over the next one or two quarters, but into the foreseeable future.”

Anand also added that the bank is well capitalised and there is no immediate proposal to raise capital. The promoters had earlier said they would inject funds into the lender, if needed.

Net interest income (NII), or the core income, rose 13% year-on-year to ₹4,562 crore, compared with ₹4,028 crore in the same period last year. Net interest margin (NIM), or core profitability, stood at 3.5% during the quarter, compared with 3.3% in Q2FY26.

The bank’s gross non-performing assets (GNPA) rose to 3.6% of gross advances at the end ofthe December quarter, compared with 2.3% a year ago. Net NPAs also increased to 1.0% of net advances from 0.7% YoY. Provisions and contingencies for the quarter stood at ₹2,096 crore, up 20% from ₹1,744 crore a year ago. Gross slippages increased to ₹2,560 crore during the quarter, compared with ₹2,200 crore in the same period last year.“If you look at the composition of slippages, we are seeing a steady trend, except to some degree in the vehicle finance and microfinance businesses,” Anand said. “We have seen elevated slippages and degrowth in microfinance. We do anticipate that both these numbers will improve as we get into Q4.” Anand added that incremental disbursals in the microfinance portfolio are showing better performance compared with the recent past.

NON-EXEC CHAIRMAN APPOINTED
The bank said it has appointed former State Bank of India (SBI) executive, Arijit Basu, as its non-executive chairman. Basu replaces incumbent Sunil Mehta, who is due to retire this month. Basu’s appointment will be effective from January 31, 2026, for a period of three years, subject to shareholder approval.