ICICI vs Axis vs HDFC Bank: How India's Top Private Lenders Fared In Q1 FY27

India's three largest private sector banks, ICICI Bank, Axis Bank and HDFC Bank, reported healthy loan growth and steady deposit mobilisation for the June quarter of FY27, even as shrinking interest margins weighed on profitability at some lenders.

Across earnings calls, top executives said the banks are now leaning on customer acquisition, deposit growth and operational efficiency to protect earnings, rather than counting on wider lending margins.

ICICI Bank recorded the sharpest rise in profit among the three banks. Its profit after tax climbed to ₹14,805 crore in the June quarter, up from ₹12,772 crore a year earlier. The bank credited this growth to broad-based lending activity and higher operating income.

HDFC Bank also posted a rise in profit after tax, up 4.98% year-on-year (YoY) to ₹19,059.72 crore. Its net interest income grew 6.67% to ₹33,533.95 crore, though the bank's overall operating profitability came under pressure during the quarter.

Axis Bank, meanwhile, focused on expanding its balance sheet. Advances at the bank grew 19% YoY to ₹12,61,557 crore, while deposits rose 18% over the same period.

Margins Under Pressure

As the Reserve Bank of India's policy rate cuts filtered into lending rates faster than into funding costs, all three banks saw their interest margins come under strain during the quarter.

Axis Bank gave the clearest read on where margins stand. The bank's net interest margin fell to 3.46% in the June quarter, which its management believes marks the lowest point of the current cycle. "Our NIM for Q1FY27 at 3.46% is our cycle bottom. With the FCNR(B) deposits opportunity, in the near term we will focus on growth and deployment of the additional liquidity raised through this route," said Amitabh Chaudhry, managing director and chief executive officer of Axis Bank.

HDFC Bank's net interest margin held flat at 3.26%, unchanged from both the previous quarter and the same period last year. However, its pre-provision operating profit fell 21.17% YoY to ₹28,168.06 crore, and its operating profit margin narrowed to 30.56% from 36.02% a year ago.

ICICI Bank did not report a similarly sharp squeeze. Its net interest income rose 12.7% YoY to ₹24,384 crore, and its core operating profit increased 15.6% to ₹20,235 crore. Sandeep Bakhshi, managing director and chief executive officer of ICICI Bank, said the bank's strategy is not built around margin expansion. "At ICICI Bank, our strategic focus continues to be on growing profit before tax, excluding treasury through the 360-degree customer-centric approach and by serving opportunities across ecosystems and micro markets," he said.

HDFC Bank's chief executive officer Sashi Jagdishan struck an optimistic note despite the profitability pressure. "The deposit growth continues to be relatively better than the historical Q1 trends. We continue to gain market share both on an incremental basis and on a stock basis as well," he said.

Loan Growth Stays Healthy Across Segments

Even with margins under pressure, credit demand remained strong through the quarter, with all three lenders reporting healthy growth across retail, small business and corporate lending.

ICICI Bank's total loans grew 19.6% year-on-year and 5.0% sequentially as of June 30, 2026. Within this, retail loans rose 12.0%, business banking advances jumped 28.2%, and domestic corporate loans increased 18.5%. The bank's profit before tax, excluding treasury income, grew 20.9% YoY to ₹18,975 crore. "The profit before tax, excluding treasury, grew by 20.9% year-on-year to INR 189.75 billion in this quarter. The core operating profit increased by 15.6% YoY to INR 202.35 billion in this quarter," Bakhshi said.

Axis Bank's lending growth was driven largely by its wholesale banking book, which grew 38% YoY. SME lending rose 25%, while retail advances grew a more modest 8%. "Our growth momentum remained firmly intact during the quarter as we continue to gain market share across advances and deposits both on a YoY and QoQ basis," Chaudhry said.

HDFC Bank's wholesale banking revenue grew 8.66% YoY to ₹48,670.85 crore. Jagdishan said the bank is preparing to step up its lending pace going forward. "Advances, as we had envisioned a while ago, I think we are on the verge of pressing the pedal," he said, adding that "there is a very healthy credit demand that we are seeing in the system as we speak."

Deposits Take Centre Stage

With lending rates repricing faster than the cost of funds, deposit mobilisation emerged as a key theme across all three earnings calls. Banks with stronger deposit franchises are better placed to protect their margins while continuing to grow their loan books.

Axis Bank reported the strongest deposit growth among the three banks. Total deposits rose 18% YoY to ₹13,72,936 crore. Term deposits grew 21%, current account deposits rose 13%, savings account deposits increased 14%, and current and savings account (CASA) deposits together grew 13%. The bank's cost of funds fell by 35 basis points year-on-year as a result. "Our efforts remain focused on further strengthening the deposit franchise through increased granularization and a more stable liability mix, supporting a resilient and well-diversified funding base," Chaudhry said.

ICICI Bank's period-end deposits grew 14.0% YoY, matching the growth in its average deposits over the same period. Average CASA deposits rose 12.1% YoY and 4.7% sequentially. "Total deposits grew by 14% YoY and 2.2% sequentially. Average deposits grew by 14% YoY and 6.1% sequentially, and average current and savings account deposits grew by 12.1% YoY and 4.7% sequentially during this quarter," Bakhshi said.

HDFC Bank's CASA ratio slipped to 32.30% from 32.80% a year earlier. Even so, Jagdishan pointed to gains in market share as a sign of the bank's improving franchise. "We continue to gain market share both on an incremental basis and on a stock basis as well," he said.

Asset Quality Holds Steady

Despite the pace of lending, all three banks reported stable or improving asset quality during the quarter, pointing to continued caution in underwriting.

ICICI Bank's gross non-performing assets (GNPA) stood at 1.67%, while net NPA was at 0.35% as of June 30, 2026. The bank's provision coverage ratio stood at 74.7%, with total provisions, excluding tax, at ₹22,963 crore.

Axis Bank's asset quality improved compared to a year earlier. Gross NPA fell to 1.28% from 1.54%, while net NPA declined to 0.39% from 0.41%. The bank's credit cost stood at 0.63%, with a provision coverage ratio of 70%. Including specific, standard and additional provisions, total coverage stood at 161% of gross NPAs.

HDFC Bank also reported an improvement in asset quality over the year, even as ratios ticked up slightly from the previous quarter. Gross NPA stood at 1.17%, down from 1.40% a year earlier, while net NPA fell to 0.41% from 0.47%. Sequentially, GNPA rose two basis points and NNPA rose three basis points.

Capital Positions Remain Strong

All three lenders continued to operate with comfortable capital buffers during the quarter. ICICI Bank's capital adequacy ratio (CAR) stood at 16.84%, including a Common Equity Tier 1 (CET1) ratio of 16.19%. Axis Bank's CAR stood at 16.67%, with a CET1 ratio of 14.64%; the bank said the quarter added 52 basis points of fresh capital. HDFC Bank also remained well capitalised, which it said would support continued spending on technology, branch expansion and customer acquisition.

All three banks struck a broadly confident tone about the year ahead, even as they acknowledged pressure on margins.

Bakhshi said ICICI Bank's priority remains growing profit before tax, excluding treasury income, through expanding its customer base across ecosystems and micro-markets.

Chaudhry said Axis Bank expects margin pressure to ease gradually from here, supported by improving funding costs and liquidity. He added that the bank expects to continue gaining market share in both advances and deposits.

Jagdishan said HDFC Bank's investments in its branch network are beginning to pay off. "Productivity at the branch continues to move up, and we realize benefits of the investments that we've done over the last five, six years," he said, adding that credit demand across the banking system remains strong.