ICICI Bank shares dip 2% after ₹1,283 crore agri loan provisioning
ICICI Bank shares fell over 2% after RBI flagged gaps in agri PSL classification, forcing higher provisions and a 4% drop in Q3 net profit
 "ICICI Bank shares dip 2% after ₹1,283 crore agri loan provisioning")
Shares of ICICI Bank, India’s second-largest private sector lender, slid over 2 per cent on Monday following the bank’s disclosure in its Q3 earnings that it had provided ₹1,283 crore as standard asset provision towards its agri priority sector credit portfolio pursuant to a Reserve Bank of India (RBI) supervisory review.
Shares of the lender closed at ₹1,379.80, down 2.26 per cent from Friday’s close.
The bank reported a 4 per cent year-on-year decline in net profit due to a spike in provisions after the RBI, in its annual supervisory inspection, flagged gaps in the classification of a part of the bank’s agriculture loan book under priority sector lending (PSL) norms. Additionally, the bank disclosed that its board has approved a two-year extension to the current managing director and chief executive officer Sandeep Bakshi, whose term will now end in October 2028.
The bank’s management said: “…there was a discussion with the board along with the MD, and a two-year term felt appropriate. Having said that, it is nearly three years from today. It is starting from October 2026 and goes on till October 2028. So, it’s nearly, nearly three years. So, we have informed the market well in advance,” they said.
“Despite one-off provisions, the bank will see a healthy return on assets (RoA) of 2.2 per cent in FY26. With the term extension of Bakshi, the bank is well positioned to continue its journey of delivering best-in-class growth and profitability,” Motilal Oswal said in its report.
According to analysts at JM Financial, ICICI Bank delivered a broadly in-line performance. The decline in net profit was driven by additional standard asset provisioning on a non-compliant agri PSL portfolio of ₹20,000–25,000 crore. This additional provision will be reversed once the non-compliant PSL portfolio comes into conformity, they said, adding that the reappointment of the managing director and chief executive officer for another two years provides continuity and strengthens execution confidence.
“With growth momentum improving, superior execution and profitability relative to peers, and the CEO reappointment, we expect the stock to outperform,” analysts at IIFL Capital said.