ICICI Bank Posts 20% Profit Rise to ₹14,843 Crore as Margin Slips to 4.18%

ICICI Bank made more money, lent more and cleaned up its loan book in the July-September quarter. It also earned less on each rupee it lends.

The lender reported net profit of ₹14,843 crore for Q2 of fiscal 2027 on Saturday, Oct. 17. That is up 20.1% from ₹12,359 crore a year earlier.

The numbers

Net interest income, the gap between what the bank earns on loans and pays on deposits, rose 17.7% to ₹25,339 crore from ₹21,529 crore.

Total loans grew 30% to ₹18.32 trillion as of Sept. 30. Strip out loans made by the bank's international branches against FCNR(B) deposits and growth was 24.1%.

Core operating profit, which excludes treasury income, climbed 21.8% to ₹20,805 crore. Operating profit after treasury came in at ₹20,575 crore, up 18.9%.

Fee income rose 20.1% to ₹7,795 crore. About 75% of it came from retail, rural and business banking customers. Non-interest income excluding treasury rose 12.5% to ₹8,277 crore.

Operating expenses grew 8.5% to ₹12,811 crore. That is slower than both income and loan growth.

Treasury loss

The treasury desk lost ₹230 crore, against a gain of ₹220 crore a year ago. The bank attributed the swing primarily to market movements.

Without that drag, the headline profit growth would have looked stronger.

Bad loans keep shrinking

Provisions fell 6.9% to ₹851 crore from ₹914 crore a year ago. Against the prior quarter's ₹1,260 crore, they dropped 32.5%.

The gross non-performing asset ratio improved to 1.20% as of Sept. 30. It was 1.38% in June and 1.58% a year earlier. The net NPA ratio eased to 0.30%.

Consolidated total assets stood at ₹32,92,952.99 crore.

The margin problem

Net interest margin came in at 4.18%. That compares with 4.36% in the April-June quarter and 4.30% a year ago.

The bank said the benefit from interest on tax refunds was negligible in the September quarter. In the preceding quarter it added 8 basis points.

Executive director Sandeep Batra pointed to two causes: heavy mobilisation of foreign currency non-resident (bank) deposits and spending on branch expansion. ICICI Bank raised $18 billion in FCNR(B) deposits through the dedicated regulatory window.

"There is likely a margin dip in NIM in the third quarter as the impact of FCNR(B) deposit mobilisation has not played out fully," Batra said.

Peers reporting the same weekend

ICICI was one of 18 companies reporting on Oct. 17. HDFC Bank posted a 4.7% rise in Q2 net profit to ₹19,510 crore as NII grew. Axis Bank's profit rose 38% to ₹7,003 crore as provisions fell, though the figure missed estimates.

ICICI's 20% growth sits between the two. HDFC Bank's profit is still larger in absolute terms.

What to watch

The bank has told the market what to expect: margin pressure in the October-December quarter. Can loan growth near 30% and falling provisions keep profit growing at a double-digit clip while the margin gives up more ground?