IndusInd Bank

IndusInd Bank reported a strong financial outcome for Q4 FY26, with Profit After Tax (PAT) reaching Rs.594 crores, a significant increase from Rs.128 crores in the previous quarter. This improvement was largely driven by enhanced asset quality, as annualized net slippages were down 37% QoQ to 1.71% from 2.65%. Consequently, provisions decreased by 29% QoQ to Rs.1,482 crores, indicating that credit costs are likely past their peak, subject to macro stability. The bank's GNPA and NNPA stood at 3.43% and 1.00% respectively, with a PCR of around 71%.

The bank continued its focus on enhancing its retail mix, with retail deposit mobilization seeing healthy traction and net additions of Rs.6,800 crores during the quarter. All incremental deposits were retail in nature, leading to an improvement in the share of average retail deposits (as per LCR) to 47.9% from 47.5% QoQ. The average CD ratio improved to 82.0% from 84.4% QoQ, and the cost of deposit marginally improved by 2bps QoQ to 6.07%. Management highlighted ongoing organizational changes, digital capability enhancements, and branch network integration to further boost retail deposit growth.

On the asset side, the overall average loan book declined 2% QoQ, primarily due to a conscious prioritization of risk-adjusted returns in Wholesale Banking, which saw a 6% QoQ decline in its average loan book. However, key retail segments showed sequential growth: Vehicle Finance loan book grew 2% QoQ to Rs.99,876 crores, and Home Loan book grew 6% QoQ to Rs.6,510 crores. Micro Loans disbursements surged 52% QoQ to Rs.5,400 crores, and gross slippages in Micro Loans reduced significantly to Rs.504 crores from Rs.1,022 crores QoQ, validating improved underwriting models. The SME loan book also grew 1% QoQ to Rs.44,347 crores.

IndusInd Bank maintained a robust capital and liquidity position, with a CET 1 ratio of 16.20% and a CRAR of 17.48%, providing ample headroom for future growth. The average Liquidity Coverage Ratio (LCR) stood at a healthy 118%. Management confirmed that the current capital levels are sufficient to support growth for at least the next year, and there are no immediate plans to raise additional capital.

AI is a core strategic priority for the bank, with investments in a dedicated AI Centre of Excellence to drive GenAI adoption. Ten high-impact use cases, including sales productivity, conversational banking, and credit underwriting, are already live. The bank's internal knowledge management application, Indus Compass, serves over 3,000 daily active users, processing 15,000 employee queries. Furthermore, over 9,000 employees have completed AI training, with plans to scale this significantly in the current financial year to build an 'AI-ready' organization.

Management expects the industry loan growth for FY27 to be in the range of 13-14%, and IndusInd Bank aims to grow broadly in line with this market trend. The bank's strategy involves rebalancing its portfolio towards more granular businesses within wholesale and traditional retail assets, including home loans and gold loans. While acknowledging the potential impact of the West Asia conflict on certain portfolios in the coming quarters, the bank remains watchful and confident in its strengthened leadership team and strategic priorities to deliver sustainable value.