IndusInd Bank flags 2.27% net worth hit from ₹1,979-crore worth lapse in derivates post external probe | Stock Market News
Source: Live Mint
Mumbai: IndusInd Bank Ltd on Tuesday said that the external agency tasked to study the lender’s derivatives debacle has estimated the negative impact at ₹1,979 crore as on 30 June, 2024. This would amount to 3.1 per cent of the bank’s net worth of ₹63,815 crore as on that date.
The bank said that based on the report, it has assessed an adverse impact (on a post-tax basis) of 2.27 per cent to its net worth as of December 2024. IndusInd Bank’s net worth stood at ₹65,102 crore crore as on 31 December, according to regulatory disclosures.
After market hours on 10 March, IndusInd Bank flagged discrepancies worth about ₹1,530 crore in its derivatives account balances. Managing director and chief executive officer Sumant Kathpalia told analysts on a call soon after the disclosure that this could have led the Reserve Bank of India (RBI) to allow him only a one-year extension instead of three.
IndusInd Bank internal review
An internal review of processes relating to accounts of IndusInd Bank’s derivative portfolio revealed these lapses, the lender said in a stock exchange filing on 10 March. It had then said that the adverse impact was estimated at about 2.35% of the bank’s net worth as of December, without specifying whether it was pre- or post-tax.
“The bank has since received the report from the external agency on 15 April 2025 which has identified discrepancies, inter alia, relating to derivative deals,” the latest filing said, adding the bank’s board discussed the matter on Tuesday.
IndusInd Bank said it will appropriately reflect the resultant impact in the financial statements for FY25 and “continue to take suitable steps to augment the internal controls relating to the derivative accounting operations of the bank.”
Kathpalia told analysts on 10 March that the bank remains healthy to “absorb this one-time impact” during the fourth quarter ending March 2025. The bank has also appointed Grant Thornton to conduct a forensic review into accounting lapses, Reuters reported on 23 March, citing two people with direct knowledge of the matter.
Meanwhile, Ashok Hinduja, chairman of IndusInd International Holdings Ltd (IIHL), the promoter of IndusInd Bank, expressed complete confidence in Kathpalia’s ability to steer the bank through its challenges, Mint reported on 12 March.
In an interview with Mint, Hinduja pointed out that the bank’s net worth of ₹65,102 crore and other key metrics were adequate to absorb any setbacks arising from discrepancies of approximately ₹1,530 crore in the derivatives account balances.
