IndusInd Bank Shares Rise 2%, Assures No Further Financial Hit From Past Frauds

Key Highlights:

- Shares up 2 percent after bank assured no more impact from past frauds.

- Q1 net profit falls 72 percent to Rs 604 crore due to earlier irregularities.

- Management promises clean results and stronger governance going forward.

Mumbai: IndusInd Bank shares went up by 2 percent on Tuesday, after the bank gave a strong assurance that all the financial impact from past frauds has already been accounted for and no further losses are expected.

On the BSE, the stock closed at Rs 818.60, while on the NSE, it ended at Rs 818.85 — both showing a 2 percent increase.

Profit Falls Sharply in Q1 FY26

The bank reported a 72 percent fall in its net profit for the April-June quarter of FY26. The profit stood at Rs 604 crore, compared to Rs 2,171 crore in the same quarter last year.

This big drop was mainly because of issues caused by past frauds and poor loan practices under previous leadership.

In fact, the bank had posted a huge loss of Rs 2,329 crore in the March quarter (Q4 FY25), raising concerns about its financial stability.

What Went Wrong Earlier?

The bank faced several issues due to bad loan recognition practices and trading losses, which were allegedly linked to decisions made by its previous top management. These problems forced the bank to admit to frauds and take big financial hits.

After the exit of former CEO Sumant Kathpalia, an interim management team has taken charge. This team is now focusing on restoring the bank’s image and improving governance.

Clean Results This Quarter

Chairman Sunil Mehta said the Q1 results are “clean and profitable”, with no carryover of past irregularities. He emphasized that all legacy issues have been dealt with, and the results now reflect a "robust recovery".

During a call with analysts, Mehta confirmed that the first quarter of FY26 was completely free from any hidden problems, and that the interim leadership has made progress in areas like microfinance and treasury operations, where earlier frauds had occurred.

Focus on Governance and Oversight

The new management is working to strengthen the internal systems, increase board oversight, and promote transparency and accountability, especially in the microfinance segment, which was one of the problem areas.

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