Asked about additional PSL costs due to agri loan reclassification, if loan growth momentum improved in Q3 and is expected to continue, and reasons for the credit card book decline.

PSL compliance costs are generally rising, but the bank will work to conform the reclassified portfolio to minimize impact. Confirmed pickup in loan growth momentum in Q3, expected to sustain in Q4. Credit card decline was due to strong Q2 festive spend followed by repayments; expects growth to improve from here. Emphasized improved credit quality in retail NPLs. “I mean, we feel that the book should grow from here on.”

Questioned the flat credit card portfolio growth over two quarters despite festive spends, and whether the corporate loan growth was driven by lower-rated (BBB) segments. Also asked about the rising OpEx growth.

Credit card flat growth is due to strong Q2 festive spend followed by Q3 repayments; views credit cards as part of overall customer offering. Corporate growth is not solely from BBB; bank participates where there's a franchise, comfortable with A-family and above, and within BBB limits. OpEx growth is influenced by PSL compliance costs and the new labor code provision; sequential costs were marginally down excluding labor code impact. Focus is on maximizing PPOP. “As we have said in the past, we are not looking at credit card just as a product portfolio in itself, but really as part of an overall customer offering...”

Asked if the moderation in business banking growth was intentional and if it has bottomed out. Also inquired about the outlook for unsecured loan growth (credit cards, personal loans) relative to overall loan growth.

Business banking is full steam ahead; moderation is due to base effect, not intentional holding back. Portfolio quality is good. Unsecured loan growth (personal loans at 2% vs overall 11.5%) will take time to exceed overall loan growth but should pick up from current muted levels. “Business banking, we are at it full steam actually.”

IBN

ICICI Bank (IBN) Q3 FY26 earnings call: the analyst Q&A

Earnings call· Dec 2025 (Q3 FY26)· Financials· Jan 17, 2026

Source: earnings call transcript

Executive summary

ICICI Bank Q3 FY26 — Strong Core Operating Profit Growth and Capital Position

ICICI Bank delivered robust core operating profit growth and maintained a strong capital position in Q3 FY26, driven by healthy domestic loan growth and stable net interest margins. The quarter saw an additional standard asset provision mandated by the RBI, impacting reported profitability, alongside a decline in the credit card portfolio. Management remains focused on risk-calibrated growth and balance sheet strength, with expectations for NIM to remain range-bound.

Highlights

Core operating profit increased by 6% YoY and 2.5% QoQ to INR 175.13 billion.
Domestic loan portfolio grew by 11.5% YoY and 4% QoQ.
Net NPA ratio improved to 0.37% at December 31, 2025, from 0.39% at September 30, 2025.
CET1 ratio remained strong at 16.46% at December 31, 2025.
Net interest margin (NIM) held steady at 4.3% QoQ and expanded from 4.25% YoY.

Concerns

Additional standard asset provision of INR 12.83 billion directed by RBI for agricultural priority sector credit facilities.
Credit card portfolio declined by 3.5% YoY and 6.7% sequentially.
Treasury loss of INR 1.57 billion in Q3 FY26, compared to a gain of INR 2.2 billion in Q2 FY26 and INR 3.71 billion in Q3 FY25.
Profit after tax decreased by 4% YoY to INR 113.18 billion.

Segment performance

Segment	Revenue	YoY	QoQ	Margin
Domestic Loan Portfolio At December 31, 2025, compared to 10.6% and 3.3% at September 30, 2025.	—	11.5%	4%	—
Retail Loan Portfolio % of total portfolio (including non-fund-based outstanding): 42.2%	—	7.2%	1.9%	—
Rural Portfolio	—	4.9%	7.2%	—
Business Banking Portfolio	—	22.8%	4.7%	—
Domestic Corporate Portfolio	—	5.6%	6.5%	—
Overall Loan Portfolio Including the international branches portfolio. Overseas loan portfolio % of overall loan book: 2.4%	—	11.5%	4.1%	—
Mortgage Portfolio	—	11.1%	3.2%	—
Auto Loans	—	0.7%	0.9%	—
Commercial Vehicles and Equipment Portfolio	—	7.9%	3.2%	—
Personal Loans	—	2.4%	1.7%	—
Credit Card Portfolio Sequential decline due to high festive spends in previous quarter and subsequent repayments.	—	-3.5%	-6.7%	—
NBFCs and HFCs Total outstanding at December 31, 2025, compared to INR 794.33 billion at September 30, 2025. % of advances: 4.3%	INR 791.18 billion	—	—	—
Builder Portfolio Including construction finance, lease rental discounting, term loans and working capital at December 31, 2025, compared to INR 635.83 billion at September 30, 2025. % of total loan portfolio: 4.3%Rated BB and below internally or nonperforming: 1.1%	INR 680.83 billion	—	—	—
ICICI Life For 9 months ended December 31, 2025. APE compared to INR 69.05 billion in 9 months last year. VNB compared to INR 15.75 billion in 9 months last year. VNB margin compared to 22.8% in FY25 and 9 months last year. Annualized premium equivalent (APE): INR 68.11 billionValue of new business (VNB): INR 16.64 billionVNB margin: 24.4%	—	—	—	PAT: INR 9.92 billion
ICICI General For Q3 FY26. Gross direct premium income compared to INR 62.14 billion in Q3 last year. Combined ratio compared to 102.7% in Q3 last year. PAT compared to INR 7.24 billion in Q3 last year. Combined ratio: 104.5%	Gross direct premium income: INR 70.41 billion	—	—	PAT: INR 6.59 billion
ICICI AMC For Q3 FY26, compared to INR 6.32 billion in Q3 last year.	—	—	—	PAT: INR 9.17 billion
ICICI Securities For Q3 FY26, compared to INR 5.04 billion in Q3 last year.	—	—	—	PAT: INR 4.75 billion
ICICI Bank Canada For Q3 FY26, compared to CAD 19.6 million in Q3 last year.	—	—	—	PAT: CAD 5.4 million
ICICI Bank U.K. For Q3 FY26, compared to USD 5.1 million in Q3 last year.	—	—	—	PAT: USD 5 million
ICICI Home Finance For Q3 FY26, compared to INR 2.03 billion in Q3 last year.	—	—	—	PAT: INR 1.95 billion

Risks & headwinds

Additional standard asset provision mandated by RBI Ongoing until loans are repaid or renewed in conformity with PSL classification guidelines.

INR 12.83 billion provision for a portfolio of INR 200 billion to INR 250 billion of agricultural priority sector credit facilities.

Mitigation:Bank will work to bring the portfolio into conformity with regulatory expectations to minimize provisioning and PSL impact.

Treasury loss due to market movements Q3 FY26

INR 1.57 billion loss in Q3 FY26, compared to gains in prior periods.

Mitigation:Not explicitly stated, but implies market-driven and not operational.

Credit card portfolio decline Q3 FY26

Declined by 3.5% YoY and 6.7% sequentially.

Mitigation:Attributed to seasonal festive spend and repayments; expects book to grow from here.

Rising cost of PSL compliance Ongoing

Not explicitly quantified for this quarter, but noted as 'steadily gone up over the last few quarters.'

Mitigation:Continuously analyzing the most efficient way to meet PSL requirements, including buying PSLCs or managing RIDF calls.

Impact of new labor code on operating costs Ongoing, with marginal increase in recurring operating costs.

INR 1.45 billion provision for estimated liability in Q3 FY26.

Mitigation:Will absorb as part of ongoing operations, focus on maximizing PPOP.

What to watch in Q4 FY26

Net Interest Margin (NIM) trajectory

From here on (next quarter and beyond)

Current 4.3%

Target Range-bound

Why it matters

NIM is a key driver of bank profitability, and its stability or movement will impact earnings.

I think we would stay with our view that the NIM should be range bound from here on.

Find out whether IBN delivers this. Inve re-checks your case every morning.

Q&A highlights

Inquired about the size of the portfolio affected by the RBI-mandated standard asset provision, the nature of the non-compliance, and the impact on future operating expenses. Also asked about the outlook for NIM given rate cuts and mortgage competition, and if deposit repricing would help.

The affected portfolio is INR 200 billion to INR 250 billion. The bank will work to bring it into conformity with PSL guidelines to minimize impact. Declined to detail the specific non-compliance. For NIM, noted Q3 saw loan repricing and KCC non-accrual offset by deposit repricing and CRR cut. Expects NIM to be range-bound going forward, with Q4 seeing repo/MCLR repricing but also continued retail deposit repricing.

“I think we would stay with our view that the NIM should be range bound from here on.”

asked by Mahrukh Adajania · answered by Anindya Banerjee

2 min read 6 chapters

Detailed narrative

RBI Mandated Standard Asset Provision

The Reserve Bank of India (RBI) directed ICICI Bank to make an additional standard asset provision of INR 12.83 billion in Q3 FY26. This provision relates to a portfolio of agricultural priority sector credit facilities, where terms were not fully compliant with regulatory classification requirements.

The underlying portfolio requiring conformity with PSL guidelines is estimated between INR 200 billion to INR 250 billion. The bank plans to work on bringing this portfolio into compliance to minimize future provisioning and PSL impact.

Loan Portfolio Dynamics

The domestic loan portfolio expanded by 11.5% YoY and 4% QoQ, with strong sequential growth in mortgage (3.2%), rural (7.2%), and corporate (6.5%) segments. The business banking portfolio also grew significantly at 22.8% YoY and 4.7% QoQ. However, the credit card portfolio saw a sequential decline of 6.7% and a YoY decline of 3.5%, attributed to high festive spends and subsequent repayments in the prior quarter.

Net Interest Margin Stability

Net interest margin (NIM) remained stable at 4.3% QoQ, expanding from 4.25% in Q3 FY25. This stability was achieved despite the impact of loan repricing due to repo and MCLR rate changes, and seasonally higher non-accrual on Kisan Credit Card (KCC) NPAs. These factors were offset by deposit repricing benefits and the CRR cut. Management expects NIM to remain range-bound going forward.

Deposit Growth and Mix

Total deposits grew by 9.2% YoY and 2.9% QoQ. While average current and savings account (CASA) deposits grew by 8.9% YoY and 1.5% QoQ, the overall savings account growth was impacted by a reduction in institutional banking savings accounts. Retail savings accounts and retail term deposits continued to show strong growth. The bank's average LCR for the quarter was 126%.

Credit Quality Improvement

The net NPA ratio improved to 0.37% at December 31, 2025, from 0.39% at September 30, 2025, and 0.42% at December 31, 2024. Gross NPA additions were INR 53.56 billion, lower than INR 60.85 billion in Q3 FY25. The provisioning coverage ratio on nonperforming loans stood at 75.4%, with additional contingency provisions of INR 131 billion (0.9% of total advances).

Operating Expenses and Efficiency

Operating expenses increased by 13.2% YoY and 1.2% QoQ. Employee expenses rose 12.5% YoY, including a INR 1.45 billion provision for the new labor code. The bank added 402 branches in 9 months, reaching 7,385 branches. Technology expenses constituted about 11% of operating expenses for the 9-month period. Management aims to maximize profit before provisions and tax (PPOP) rather than strictly cutting costs.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.