Lower loss due to derivatives portfolio discrepancies ‘positive’ for IndusInd Bank in near term, says Macquarie

Impact of the discrepancies amount to ₹15.2 billion, or 2.27% of the bank’s net worth as of Q3FY25
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The lower amount of financial hit that IndusInd Bank will take on its balance sheet due to discrepancies found in its derivatives book, as assessed by an external auditor, is seen as incrementally positive for the bank in near term, brokerage Macquarie said in a report.

“IIB (IndusInd Bank) recently disclosed that the external agency which was appointed to ascertain discrepancies in derivative book accounting has quantified the impact of the same. It amounts to 2.27 per cent (₹15.2 billion) of the bank’s net worth (as of Q3FY25). This is marginally lower than the number estimated in the banks internal review (2.35 per cent of net worth, i.e. ₹15.8 billion),” the brokerage said.

“We believe this is incrementally positive in the near term as the impact of discrepancies will be limited to what was ascertained earlier by management,” it added.

With initial assessment of net loss completed by an external agency, focus now shifts to the forensic audit report due from another external agency, where the focus is to ascertain the root cause and accounting for the discrepancies.

In the near-medium term, the brokerage said it believes that focus would be to obtain more clarity around management succession. While the bank’s valuation are cheap currently, uncertainty around management succession, peak credit costs, sustainable margins, and other factors remain key monitorables, it said. ENDS

Published on April 16, 2025