(Adds details throughout) MUMBAI, Oct 18 (Reuters) - Indian private lender IndusInd Bank reported a net loss for the second quarter on Saturday, in its first earnings report since a new chief executive was appointed as the lender stepped up provisions for bad loans and continued to shrink its business. The Mumbai-based bank posted a standalone net loss of 4.36 billion Indian rupees ($49.56 million) for the three months ended September, compared with a profit of 13.31 billion rupees a year earlier. Analysts had expected a profit of 6.37 billion rupees, according to data compiled by LSEG. The bank found itself in the midst of a crisis earlier this year as governance and accounting lapses surfaced, leading to the exit of its former CEO Sumant Kathpalia and deputy Arun Khurana. The bank took a $230 million hit to its accounts and posted its largest ever loss in the quarter ended March. It swung back to profitability in the June quarter and veteran banker Rajiv Anand took over as chief executive at the end of August. The financial impact of the discrepancies has been completely accounted for, Anand said. For the quarter ended September, the bank increased its provisions and contingencies by 44% to 26.22 billion rupees as the lender continued to build buffers. The bank has chosen to step up provisions against micro loans, where the industry has seen signs of stress, Anand said. The bank also chose to write-off some of these loans, which requires a lender to increase provisions. Its asset quality was stable with gross non-performing asset ratio at 3.6% at the end of September. The bank’s loan book declined 9% over a year ago and deposits fell 6%. Net interest margin, a key measure of the bank’s profitability, fell to 3.32%, compared to 4.08% in the corresponding quarter last year, due to the Indian central bank's recent rate cuts. When rates are lowered, lenders typically pass on the advantage to borrowers first and only later cut deposit rates, which temporarily squeezes their margins. ($1 = 87.9740 Indian rupees) (Reporting by Ashwin Manikandan and Ira Dugal; Editing by Ronojoy Mazumdar) (The article has been published through a syndicated feed. Except for the headline, the content has been published verbatim. Liability lies with original publisher.)
