ICICI Bank Q3 Profit Slips 4% YoY as Provisions Double, Core Performance Remains Steady

ICICI Bank on Saturday reported a 4% year-on-year decline in standalone net profit for the third quarter of FY26. India’s second-largest private lender reported profit after tax of ₹11,318 crore in Q3 FY26, compared with ₹11,792 crore in the year-ago quarter.

A sharp increase in provisions weighed on the bank’s bottom line, even as operating performance remained steady and asset quality improved. Provisions (excluding tax) rose 108% year on year to ₹2,556 crore in Q3 FY26, compared with ₹1,227 crore in Q3 FY25.

The bank said that following its annual supervisory review, the RBI directed it to make a standard asset provision of ₹1,283 crore for a portfolio of agricultural priority sector credit facilities, where the terms were found to be not fully compliant with regulatory requirements for classification as agricultural priority sector lending.

The bank also took a one-time charge of around ₹145 crore during the quarter based on estimates linked to the implementation of new labour codes, which further weighed on earnings.

Net interest income rose 7.7% YoY to ₹21,932 crore from ₹20,371 crore in Q3 FY25, supported by loan growth and stable margins. Net interest margin stood at 4.30%, unchanged sequentially and slightly higher than 4.25% a year ago.

Operating expenses increased 13.2% YoY to ₹11,944 crore, partly due to the labour code-related provision. Treasury performance also impacted the quarter, with the bank reporting a loss of ₹157 crore compared with a gain of ₹371 crore in Q3 FY25.

Despite these headwinds, core operating profit grew 6% YoY to ₹17,513 crore, reflecting steady growth in interest and fee income.

ICICI Bank shares slipped 0.4% to close at ₹1,413 on the NSE on Friday.

Asset quality continued to improve, with the gross NPA ratio easing to 1.53% as of December 31, 2025, from 1.58% at the end of September 2025 and 1.96% a year earlier. The net NPA ratio also declined to 0.37% from 0.39% sequentially and 0.42% at the end of December 2024.

The bank’s domestic loan book expanded 11.5% year on year to ₹14,30,895 crore as of December 31, 2025. Including profits for the nine months ended December 31, 2025, the standalone capital adequacy ratio stood at 17.34%, while the CET-1 ratio was 16.46%, reflecting a strong capital position.

On a consolidated basis, profit after tax came in at ₹12,538 crore in Q3 FY26, compared with ₹12,883 crore in the corresponding quarter last year. Consolidated assets rose 8.8% YoY to ₹27,53,471 crore as of December 31, 2025, from ₹25,31,488 crore a year earlier.