Industry Odisha Bureau, Aug 30: IndusInd Bank has repaired much of its balance sheet under new leadership. Profitability and loan growth have both improved since Rajiv Anand took charge. The bank now targets a 1% return on assets by fiscal 2027’s year end. But the harder challenge is generating sustainable returns and restoring lasting confidence.
Annualized RoA stood at 0.78% at June-end, according to recent company data. Adjusted for one-time tax-refund interest, that underlying figure falls to roughly 0.63 percent. Reaching 1% RoA marks a stabilization milestone, though not the final objective. The bank ultimately needs RoE exceeding its roughly 12% cost of equity. Even at 1% RoA, projected RoE could still remain in single digits. JM Financial estimates FY28 RoE near 9%, still well below private-bank peers.
Consolidated net profit jumped 75% sequentially to ₹1,037 crore last reported quarter. Loans grew 3.3% sequentially to ₹3.26 trillion, led by the corporate segment. Gross NPAs improved from 3.43% to 3.25% during the recent reported quarter. Deposits also strengthened overall, rising to approximately ₹4.15 trillion, company disclosures showed.
The bank’s troubles began with a March 2025 derivatives-accounting disclosure last year. That crisis triggered forensic reviews, executive resignations and regulatory proceedings that continue.
Microfinance remains stressed despite improving trends across fresh slippages and overall collections. The segment recorded ₹817 crore of write-offs during the June quarter alone. Vehicle finance is another key vulnerability, with net slippages reaching 2.01% recently. That segment represents nearly 30% of IndusInd’s total outstanding loan book currently. A delayed recovery there could threaten the bank’s broader overall RoA trajectory.
IndusInd is also working to significantly reduce its reliance on bulk deposits. It aims for a more granular mix of retail, affluent and NRI deposits. Indian banking liabilities have broadly shifted away from traditional low-cost CASA deposits. Households increasingly favor mutual funds and other competitive alternative financial savings channels. IndusInd also aims to close a 150-basis-point cost-of-funds gap versus its closest peer.
Retaining key personnel remains difficult amid aggressive poaching attempts from rival banks. Analysts flagged particular risk within the bank’s commercial-vehicle and MSME lending teams. Such attrition could gradually erode the bank’s competitive RoE-generating advantage over time. Rebuilding trust in the deposit franchise also remains a considerable ongoing challenge.
IndusInd’s three-year strategy targets market-aligned growth first, then eventual gradual market-share gains. Leadership in select focus areas is only eventually envisioned by fiscal year 2029. Anand’s first-phase repair has restored reported profitability across most core banking segments. The harder second-phase task now is rebuilding lasting stakeholder trust and confidence.
