IndusInd Bank’s corporate loan book is a bigger worry than its ₹2,238 crore net loss

IndusInd Bank reported a net loss of ₹2,328 crore in the March quarter on Wednesday, May 21. This was its first net loss in a quarter in nearly two decades. But there is a bigger headache that the Mumbai-based private lender has to contend with: the corporate loan book.

But why is the corporate loan book so important and sought after?
Most corporate loans have a large ticket size and also helps banks generate healthy fees through these transactions. Corporates engaging with a particular bank comes across as a sign of trust within the lender.

With corporates finding alternative routes like equity and debt market to raise funds, instead of the usual bank loans, lenders across the board have seen a slowdown in their corporate loan book growth.

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However, IndusInd Bank became the only lender this quarter to have reported a decline in its corporate loan book both sequentially as well as on a year-on-year basis. On the other hand, the corporate loan book at State Bank of India, India’s largest lender, grew 5.5% in the March 2025 quarter, higher than its overall loan growth of 3.8% on a sequential basis.

The 15.7% quarter-on-quarter decline in IndusInd’s corporate loan book in the January-March period is at levels never seen before in the sector.

What makes it worse is the fact that the decline came during the fourth quarter of a financial year, which is, historically, the best quarter for business. Does this mean that IndusInd Bank has lost trust among corporates?

Shares of IndusInd Bank opened 5% lower on Thursday before staging a recovery from the lows to trade 3% higher. The stock has now given up all of those gains as well to trade below the flat line.

Read more: IndusInd Bank falls behind Bandhan and Federal Bank in FY25 profit after Q4 loss