IndusInd Bank posts flat quarterly deposit growth amid accounting lapse

IndusInd Bank's fourth-quarter loan growth dropped 5.2% and its deposit expansion remained flat from three months ago, the Indian private lender said on Friday, weeks after disclosing an accounting lapse in its derivatives portfolio.

The discrepancy at the country's fifth-largest private sector bank resulted in a $175 million hole in its balance sheet, raised concerns over governance and led it to appoint Grant Thornton to conduct a forensic review.

On an annual basis, the lender's loans grew a modest 1.4%, while deposits rose 6.8%. The bank's shares are down nearly 25% since the lender disclosed the lapse.

The lender in March garnered $2 billion in higher-cost bulk deposits, its biggest monthly haul in at least two years, to shore up its funding base.

Its CASA ratio - the share of low-cost current and savings account deposits and a measure of operational efficiency - slipped to 32.8% from 34.9% in the prior quarter and 37.9% a year ago.

Its liquidity coverage ratio, or the portion of highly liquid assets held to ensure ability to meet their short-term obligations, stood at 118.4% for the fourth quarter.

IndusInd has also been grappling with elevated bad loans in the microfinance segment, leading to a drop in profit in the last two quarters.

Despite the accounting lapse, the bank expects to report a profit for the fourth quarter and the financial year 2025, its CEO told CNBC-TV18 in March.