A recovery plan is taking shape at IndusInd Bank as the lender turns to its commercial vehicle and microfinance businesses to regain momentum after a period marked by accounting issues and leadership changes.
During the post-December quarter earnings call, Managing Director and CEO Rajiv Anand said the new leadership team is focused on restoring growth and improving business stability.
The bank’s loan book showed mixed performance in the December quarter. Total loans stood at ₹3.17 trillion, down 13% year-on-year. Retail loans were ₹1.61 trillion, a decline of 3%, and formed 51% of the portfolio. Commercial vehicle loans rose 5% year-on-year to ₹98,196 crore and made up 35% of the book. Consumer banking loans increased 18% to ₹31,057 crore. Wholesale banking fell 28% to ₹1.12 trillion, while microfinance loans dropped 46% to ₹17,669 crore.
“We are seeing that incremental disbursals on our microfinance book are behaving much better than what we have seen in the very recent past,” Anand said. He added that both growth and slippages in the microfinance segment are expected to improve from current levels.
The bank has identified key focus areas for future growth. Commercial vehicle finance continues to be a stable performer. Microfinance is showing better repayment trends in new disbursements. The MSME segment is expected to strengthen and support fee income. On the funding side, the bank is shifting towards granular retail deposits instead of bulk deposits.
Anand said disbursements in vehicle finance, retail, and granular corporate lending remained healthy despite a fall in overall average advances.
On the liability side, total deposits declined 4% year-on-year and 1% quarter-on-quarter to ₹3.93 trillion. The bank plans to expand its retail liability base to lower funding costs and reduce volatility. “Our intent is to grow in line with the market on both assets and liabilities in 2026-27, and as we think about granulizing our liabilities, the intent is to grow our liability franchise faster than our bulk deposits,” Anand said.
The bank aims to achieve a return on assets of 1% on an exit basis over the next 12–18 months. Capital adequacy remains comfortable for near-term growth. Investments are being made in retail banking through organisational changes, process upgrades, and better branch productivity.
On regulatory matters, Anand clarified that the Serious Fraud Investigation Office probe relates to certain current and former officials, not the bank itself. He also said the audit qualification at subsidiary Bharat Financial Inclusion is linked to legacy issues, with financial impact already provided for in earlier years.
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