IndusInd Bank aims for 1% RoA by FY27-end; focus on growing retail book

IndusInd Bank aims to end the current financial year with a return on assets (RoA) of 1%, driven by lower expenses, growth in retail loans and liabilities, and AI-led operational efficiencies, managing director and chief executive officer Rajiv Anand said in the bank’s post-earnings call on Wednesday.

Anand, who took over as chairman of the bank on August 25, 2025, replacing Sumant Kathpalia, said last year’s balance sheet recalibration had led to improvements in the bank’s deposits, asset quality, profitability and capital position.

“We say we will grow in line with the market and try to achieve 1% exit ROA in FY27. We stand behind that,” Anand said. ROA in the reporting quarter was 0.78%; this was 32 basis points and 33 basis points higher than the previous year, respectively.

Anand was appointed as the managing director of the company The bank ended up with an estimated loss of approximately $200 million after former DEO Kathpalia resigned, effective April 29, 2025, and took “moral responsibility” for derivative accounting practices. ₹1,960 crore for the bank.

“Q1 marks a clear turning point for the bank,” Anand said on Wednesday, adding that the bank has entered the next phase of its journey. He added that the lender is focused on “accelerating sustainable risk-adjusted growth” from a significantly stronger operating foundation that positions it to deliver stronger growth, improved profitability and better returns in the coming quarters.

1st quarter results

private sector Lender announces consolidated net profit ₹1,037 crore in the quarter, up 72% year-on-year and 75% quarter-on-quarter; This was largely due to both annual and sequential declines in operating expenses and provisions. Net interest income increased 1% on a yearly basis and 7% on a quarterly basis ₹4,685 crore and the net interest margin (NIM) was 3.57%, better than 3.39% in the previous quarter and 3.46% in the previous year.

Finance chief Viral Damnia said margins were supported by the rising share of high-yield wholesale loans, but NIM was expected to remain at the range limit for the entire year.

“We have seen a decrease in both the cost of deposits and the yield on advances. So some of these offset each other,” Damania said, adding that as the bank begins to grow other retail business lines, especially auto loans and microfinance, the effect of lower returns will begin to be reflected in margins again.

“NIM holds the average throughout the year. You may see some movement within the quarter, but from an annual perspective that’s pretty much the case,” he added.

“We enter FY27 from a more resilient position with stronger fundamentals and increasing business momentum,” Anand said. He added that the priority is to accelerate profitable growth in retail, small and medium enterprises, rural and wholesale banking; deepening deposit privileges; scale transaction banking capabilities; Leverage digital and AI investments to improve customer experience, productivity and risk management.