Synopsis: Indusind Financial institution and Federal Financial institution each noticed optimistic investor sentiments after the Q2 FY26 outcomes had been declared. Nevertheless, Indusind Financial institution’s profitability was impacted primarily by accounting malpractices throughout the quarter.
On this article, we’ll evaluate two of the main non-public banks, particularly Indusind Financial institution and Federal Financial institution, throughout key parameters like profitability, asset high quality, deposits, and advances, and so forth, and in the long run we’ll take a look at which one of many two carried out higher.
Income and Profitability
IndusInd Financial institution reported a Internet Curiosity Earnings (NII) of Rs 4,409 crore in Q2 FY26, representing a 18 p.c decline from Rs 5,347 crore in Q2 FY25. Moreover, it recorded a decline of 5 p.c from its earlier quarter determine of Rs 4,640 crore.
Coming to its profitability entrance, IndusInd Financial institution reported a internet lack of Rs 437 crore in Q2 FY26 as in comparison with a revenue of Rs 1,331 crore in Q2 FY25 and a revenue of Rs 604 crore in its earlier quarter.
Then again, Federal Financial institution reported a Internet Curiosity Earnings (NII) of Rs 2,495 crore in Q2 FY26, which is a development of 5.4 p.c from Rs 2,367 crore in Q2 FY25. Moreover, it recorded a development of 6.8 p.c from its earlier quarter determine of Rs 2,337 crore.
Federal Financial institution reported a revenue decline of 10 p.c to Rs 955 crore in Q2 FY26 as in comparison with Rs 1,057 crore in Q2 FY25. Nevertheless, on a quarterly foundation, it recorded a development of 11 p.c from Rs 862 crore.
General, Federal Financial institution clearly outperformed IndusInd Financial institution throughout the interval. IndusInd’s weak efficiency was primarily as a result of a pointy fall in profitability, because it reported an enormous lack of Rs 2,329 crore.
The financial institution confronted points associated to poor company governance and accounting irregularities, which pressured its new CEO, Rajiv Anand, to wash up the books. As a part of this, the financial institution wrote off Rs 1,940 crore from its microfinance mortgage portfolio and made heavy provisions for potential unhealthy loans.
A senior official talked about that Rs 900 crore of those provisions had been further, taken particularly due to the cleanup, whereas the remaining Rs 2,631 crore had been a part of its common provisioning course of.
Asset High quality
Indusind Financial institution’s asset high quality worsened throughout the interval. GNPA elevated by 149 bps to three.60 p.c as in comparison with 2.11 p.c in Q2 FY25. Additionally, NNPA elevated by 40 bps and at the moment stands at 1.04 p.c as in comparison with 0.64 p.c in Q2 FY25. Provision Protection Ratio elevated by 200 bps to 72 p.c.
Then again, Federal Financial institution’s asset high quality strengthened throughout the interval. GNPA decreased by 26 bps to 1.83 p.c as in comparison with 2.09 p.c in Q2 FY25. Additionally, NNPA barely decreased by 9 bps and at the moment stands at 0.48 p.c as in comparison with 0.57 p.c in Q2 FY25. Provision Protection Ratio elevated by 163 bps to 73.45 p.c. Nevertheless, the Slippage ratio barely elevated by 18 bps to 0.94 p.c.
Right here, by way of asset high quality, Federal Financial institution carried out higher as in comparison with Indusind Financial institution.
Deposits and Advances Progress
Indusind Financial institution’s whole deposits have declined by 6 p.c to Rs 3,89,600 crore in Q2 FY26 as towards Rs 4,12,397 crore in Q2 FY25. CASA deposits had been Rs 1,19,771 crore, with present account deposits at Rs 31,916 crore and Financial savings Account deposits at Rs 87,854 crore. CASA deposits accounted for 31 p.c of the whole deposits as of September 30, 2025.
Coming to whole advances, it has a complete mortgage ebook of Rs 3,25,881 crore, which declined by 9 p.c YoY and a pair of p.c QoQ, the place 60 p.c of its mortgage ebook is uncovered to shopper banking and the remaining 40 p.c to company & industrial banking.
Then again, Federal Financial institution’s whole deposits have elevated by 7 p.c to Rs 2,88,920 crore in Q2 FY26 as towards Rs 2,69,107 crore in Q2 FY25. CASA deposits had been Rs 89,591 crore, with present account deposits at Rs 19,233 crore and Financial savings Account deposits at Rs 70,358 crore. CASA deposits accounted for 31 p.c of the whole deposits as of September 30, 2025.
Coming to whole advances (prospects), it has a mortgage ebook of Rs 2,55,613 crore, which grew by 6 p.c YoY and a pair of p.c QoQ, highlighting a robust creation of asset base for the long run.
General, Federal Financial institution confirmed regular development with greater deposits and mortgage enlargement, whereas IndusInd Financial institution noticed declines in each. Nevertheless, each maintained a wholesome CASA ratio of 31 p.c.
Different Key Ratios
Indusind Financial institution reported a Internet Curiosity Margin of three.32 p.c, which declined 76 bps YoY and 14 bps QoQ. It reported a unfavorable ROE and ROA of two.68 p.c and 0.33 p.c respectively. Value of Earnings additionally elevated considerably by 1401 bps YoY and 399 bps QoQ to 66.22 p.c.
Then again, Federal Financial institution reported a Internet Curiosity Margin of three.06 p.c, which declined 6 bps YoY however elevated by 12 bps QoQ. It reported an ROE and ROA of 11.01 p.c and 1.09 p.c respectively, each declined throughout the interval. Value of Earnings additionally elevated by 103 bps YoY however declined by 85 bps QoQ to 54.04 p.c.
General, Federal Financial institution was extra spectacular and resilient than IndusInd Financial institution when evaluating their performances throughout the sector. IndusInd was affected by governance points, needed to make heavy write-offs, and noticed its deposits and advances decline, whereas Federal Financial institution stored on rising, asset high quality remained steady, and profitability was maintained. Despite the fact that margins dropped a bit, Federal Financial institution was capable of beat IndusInd Financial institution on the again of its robust fundamentals and good administration within the quarter below evaluation.
Written by Satyajeet Mukherjee
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