IndusInd Bank Loans Shrink, Low-Cost Deposits Vanish in Q3 Setback

BANKINGFINANCE

Overview

IndusInd Bank reported a challenging December quarter, with net advances falling 13.1% year-on-year to ₹3.18 lakh crore. Net deposits also declined 3.8% YoY. The bank's crucial CASA ratio dropped to 30.3%, signaling pressure on its ability to attract low-cost funding.

IndusInd Bank Posts Weak Q3 Business Update

IndusInd Bank disclosed provisional figures for its December quarter on Monday, revealing a significant slowdown across key balance-sheet items. Net advances contracted 13.1% year-on-year to ₹3.18 lakh crore as of December 31, 2025. This marked a sequential decline of 2.2% from the previous quarter.

Deposit Growth Falters

Net deposits also showed weakness, settling at ₹3.94 lakh crore, down 3.8% from the prior year. However, deposits saw a slight sequential uptick of 1.1% quarter-on-quarter. The bank noted retail deposits and those from small business clients aggregated ₹1.85 lakh crore during the period.

CASA Ratio Decline Signals Margin Pressure

A critical indicator, the bank's CASA (Current Account Savings Account) ratio, slipped to 30.3% in the December quarter. This represents a noticeable drop from 34.9% a year ago and a slight dip from 30.7% in September. The decline highlights growing pressure on the bank's ability to mobilize low-cost deposits, which are vital for profitability.

These numbers are subject to a limited review by IndusInd Bank's statutory auditors. Shares of IndusInd Bank concluded trading slightly lower at ₹897.85 on the National Stock Exchange prior to the announcement.

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