India’s IndusInd Bank posts largest-ever quarterly loss

BENGALURU: IndusInd Bank, India’s fifth-biggest private lender by assets, reported its biggest-ever quarterly loss on Wednesday and said it suspects some employees had engaged in fraud that led to accounting lapses, which weighed on results.

The bank, founded in 1994, posted a standalone net loss of 22.36 billion rupees ($261.6 million) for January-March, compared with a profit of 23.47 billion rupees a year earlier.

Net interest income fell to 30.48 billion rupees from 53.76 billion rupees, as the bank adjusted for accounting lapses across its derivatives book and its microfinance portfolio.

IndusInd disclosed in March that years of incorrect accounting of internal derivative trades led to a $230 million hit to its accounts for the financial year ended March 31.

Separately, an internal audit of its microfinance business found that around $80 million was incorrectly recorded as interest over three quarters, which it reversed in January.

Its CEO, Sumant Kathpalia, and deputy, Arun Khurana, stepped down last month.

The “Board suspects the occurrence of fraud against the Bank and the involvement therein of certain employees having a significant role in the accounting and financial reporting of the Bank,” IndusInd Bank said in a statement.