ICICI Bank (NYSE:IBN) reported a 20.1% year-over-year increase in second-quarter fiscal 2027 profit after tax to INR 148.43 billion, supported by growth in net interest income, fees and lending across corporate, business banking, retail and rural portfolios.
Profit before tax excluding treasury rose 23.4% from a year earlier to INR 199.54 billion, while core operating profit increased 21.8% to INR 208.05 billion. Core operating profit excluding dividends from subsidiaries increased 25% to INR 203.42 billion.
The bank’s consolidated profit after tax grew 22.3% year over year to INR 163.33 billion. Its treasury operation recorded a loss of INR 2.3 billion during the quarter, compared with a gain of INR 2.2 billion a year earlier, reflecting market movements.
Deposits and Loans Expand
Total deposits increased 27.1% year over year and 11.8% sequentially as of Sept. 30, 2026. The bank mobilized about $18 billion in gross foreign currency non-resident, or FCNR, deposits through the Reserve Bank of India swap facility. Excluding FCNR deposits, period-end deposits rose 17% from a year earlier and 3.1% from the prior quarter.
Loans, including international branches, rose 30% year over year and 12% sequentially. Excluding international-branch loans against FCNR deposits, loans increased 24.1% year over year and 7.3% sequentially.
Retail and rural lending grew 14.8% year over year and 3.2% sequentially, representing 43% of the total portfolio including non-fund-based outstanding. Business banking loans rose 33.8% year over year, while domestic corporate loans increased 30.6%.
Within retail and rural products, mortgage lending increased 15.3% year over year, personal loans rose 16.6%, and jewel loans climbed 79.4%. Vehicle loans rose 7.8%. The credit-card portfolio declined 9.7% from a year earlier and 0.2% sequentially.
Group CFO Anindya Banerjee said retail loan growth has improved over recent quarters, with mortgage and personal-loan growth returning to mid-teen levels. He said corporate loan growth was driven by client demand and pricing, including working-capital needs, shifts from bond and foreign-currency borrowing markets, and some investment activity.
“It is not really, in terms of our thinking, a temporary thing from a liquidity perspective,” Banerjee said of corporate growth. He said the bank would pursue opportunities across retail and corporate lending that meet its risk-return standards.
Margins Expected to Moderate in Third Quarter
Net interest income increased 17.7% year over year to INR 253.39 billion. Net interest margin was 4.18%, compared with 4.30% in the same quarter a year earlier and 4.36% in the prior quarter. Excluding interest on an income-tax refund, the previous quarter’s margin would have been 4.28%.
Banerjee attributed the margin moderation to the larger proportion of overseas assets and a substantial sequential increase in retail term deposits. The cost of deposits rose to 4.50%, from 4.41% in the prior quarter, though it remained below 4.64% a year earlier.
The bank expects the full impact of FCNR deposit mobilization on average balances to appear in the third quarter, leading to additional margin moderation. Banerjee said margins should begin to improve in the fourth quarter, even if policy rates do not increase further.
He said the bank viewed the FCNR program as a long-term funding opportunity rather than a change in strategy toward prioritizing net interest income over margin. Of the approximately $18 billion raised, he said roughly $10 billion involved loans provided to customers, about $3.6 billion involved loans from partner banks, and more than $4 billion represented customers’ own funds.
Asset Quality Improves
The net non-performing asset ratio improved to 0.3% at Sept. 30 from 0.5% at June 30 and 0.39% a year earlier. The provision coverage ratio on non-performing loans was 75%.
Gross NPA additions were INR 48.33 billion, down from INR 50.34 billion in the prior-year quarter. Recoveries and upgrades totaled INR 36.20 billion, resulting in net additions of INR 12.13 billion, compared with INR 13.86 billion a year earlier.
Total provisions were INR 8.51 billion, equal to 4.1% of core operating profit and 0.2% of average advances, down from INR 9.14 billion in the prior-year period. The bank held INR 131 billion in contingency provisions, equivalent to about 0.7% of total advances.
Banerjee said new NPA formation remained negligible in corporate lending, low in business banking and stable in retail. He said the bank continues to expect normalized credit costs of up to 50 basis points after adjusting for corporate recoveries, FCNR-related standard-asset provisions and seasonal agricultural provisions.
Fees and Subsidiaries Contribute
Non-interest income excluding treasury increased 12.5% year over year to INR 82.77 billion. Fee income rose 20.1% to INR 77.95 billion, with retail, rural and business-banking customers accounting for about 75% of fees. The quarter included fees from lending facilities backed by FCNR deposits.
Operating expenses increased 8.5% year over year. The bank added 145 branches in the first half, ending September with 7,656 branches. Technology spending represented about 11.2% of operating expenses during the first half.
Among subsidiaries, ICICI Life’s value of new business increased to INR 12.83 billion in the first half from INR 10.49 billion a year earlier, while its value of new business margin reached 26%. ICICI General’s second-quarter profit after tax rose to INR 9.46 billion from INR 8.2 billion. ICICI AMC’s profit after tax increased to INR 8.89 billion from INR 8.38 billion.
The bank’s CET1 capital ratio stood at 16.01%, and total capital adequacy was 16.68% at Sept. 30. During the quarter, ICICI Bank also purchased an additional 2% stake in ICICI Life Insurance for INR 14.7 billion.
About ICICI Bank (NYSE:IBN)
ICICI Bank Limited is a private-sector banking and financial services company headquartered in Mumbai, India. The bank provides a broad range of services to retail customers, businesses, institutions and government entities, including savings and current accounts, deposits, personal and business loans, mortgages, credit cards, payments, investment services and wealth management.
Through its corporate and institutional banking operations, ICICI Bank offers working-capital finance, term lending, trade finance, cash-management services, foreign-exchange services, capital-market solutions and other banking products.
