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    ICICI Bank

    ICICIBANK
    Financial Services·18 Oct 2025
    Management Summary

    ICICI Bank reported a robust performance for Q2 FY26, with significant year-on-year growth in core profitability metrics, including profit before tax excluding treasury, core operating profit, and profit after tax. The bank demonstrated healthy loan book expansion, particularly in domestic and business banking segments, alongside an improvement in asset quality with a lower net NPA ratio. Management expressed a positive outlook on growth, expecting margins to remain range-bound in the near term and capital levels to be sufficient for future expansion.

    Highlights

    8

    • Profit before tax excluding treasury grew by 9.1% year-on-year to ₹161.64 billion.

    • Core operating profit increased by 6.5% year-on-year to ₹170.78 billion.

    • Profit after tax grew by 5.2% year-on-year to ₹123.59 billion.

    • Consolidated profit after tax grew by 3.2% year-on-year to ₹133.57 billion.

    • Net interest income increased by 7.4% year-on-year to ₹215.29 billion.

    • Net NPA ratio improved to 0.39% at September 30, 2025, from 0.41% in the previous quarter.

    • Domestic loan portfolio grew by 10.6% year-on-year and 3.3% sequentially.

    • CET-1 ratio stood strong at 16.35% and total capital adequacy ratio at 17.00% at September 30, 2025.

    Guidance & targets

    12
    CategoryTargetPriority
    Profitability
    Profit before tax excluding treasury growth
    Growing
    		Medium
    Balance Sheet
    Balance sheet strength
    Maintain strong balance sheet
    		High
    Growth
    Overall growth outlook
    Positive
    		High
    Margins
    Net Interest Margin (NIM) outlook
    Range-bound
    		High
    Margins
    Net Interest Margin (NIM) outlook
    Range-bound
    		High
    Capital
    Balance sheet strength
    Maintain strong balance sheet
    		High
    Capital
    Capital as growth constraint
    Not constraining growth
    		High
    Loan Growth
    Personal loans book growth
    May take a little while to show up
    		Medium
    LDR
    Loan-to-Deposit Ratio (LDR) sustainability
    Sustainable at current or slightly higher levels
    		High
    Regulatory Impact
    RBI guidelines on capital (net-net)
    Positive
    		Medium
    Regulatory Impact
    ECL regime impact on provisions
    No impact expected
    		High
    Operating Expenses
    Overall opex sequential increase
    No increase at Q2 pace
    		Medium
    2 min read

    Detailed Narrative

    ICICI Bank delivered a strong financial performance for the second quarter of fiscal year 2026 (Q2 FY26), ending September 30, 2025. The bank reported a profit before tax excluding treasury of ₹161.64 billion, marking a 9.1% year-on-year increase and a 3.0% sequential growth. Core operating profit also saw a healthy rise of 6.5% year-on-year, reaching ₹170.78 billion. Ultimately, the profit after tax grew by 5.2% year-on-year to ₹123.59 billion, while consolidated profit after tax increased by 3.2% year-on-year to ₹133.57 billion. Net interest income (NII) expanded by 7.4% year-on-year to ₹215.29 billion, with the net interest margin (NIM) standing at 4.30% for the quarter. Non-interest income, excluding treasury, contributed significantly, growing by 13.2% year-on-year to ₹73.56 billion, driven by a 10.1% year-on-year increase in fee income to ₹64.91 billion.

    The bank demonstrated robust loan book expansion, with the overall loan portfolio, including international branches, growing by 10.3% year-on-year and 3.2% sequentially. The domestic loan portfolio was a key driver, increasing by 10.6% year-on-year and 3.3% quarter-on-quarter. Within domestic loans, business banking showed exceptional growth at 24.8% year-on-year, while the retail loan portfolio grew by 6.6% year-on-year. Deposit growth remained solid, with average deposits increasing by 9.1% year-on-year and average CASA deposits by 9.7% year-on-year. Asset quality continued to improve, with the net NPA ratio declining to 0.39% at September 30, 2025, from 0.41% in the preceding quarter. The provisioning coverage ratio on non-performing loans was strong at 75.0%, complemented by contingency provisions of ₹131.00 billion.

    Management expressed a positive outlook on growth, noting that sequential growth in Q2 across all retail portfolios and business banking has picked up, with expectations for these trends to sustain. They emphasized a focus on risk-calibrated profitable growth and maintaining a strong balance sheet. On margins, the bank expects them to remain largely range-bound for the next couple of quarters, citing various market dynamics. Capital adequacy remains robust, with a CET-1 ratio of 16.35% and a total capital adequacy ratio of 17.00%, providing ample room for future growth without being a constraint.

    During the Q&A session, management addressed concerns regarding the impact of new RBI guidelines on Expected Credit Loss (ECL) and risk weights, stating that they do not anticipate any significant impact due to the bank's current provisioning levels. They also clarified that while they are increasing disbursements in personal loans, book growth may take some time to reflect due to runoffs. Operating expenses are not expected to increase at the same pace as Q2 in the upcoming quarter. The overall tone from management was bullish, backed by detailed financial figures and a clear strategic direction, with no significant red flags identified.

    This is an AI-generated summary of a publicly available earnings call transcript. It is for informational purposes only and does not constitute investment advice, a recommendation, or an endorsement. inve.money is not a SEBI-registered investment advisor. Please consult a qualified financial advisor before making any investment decisions.