ICICI Bank Q2 results: Profit up 5% at ₹12,359 cr aided by low provisions

Treasury income slumps due to rise in bond yields

ICICI Bank reported a 5.2 per cent year-on-year (Y-o-Y) increase in standalone net profit to Rs. 12,359 crore for the quarter ended September (Q2FY26), compared to Rs 11,746 crore in the same period last year. The bank's performance was supported by lower provisions during the quarter. 

 

However, there was a sharp decline in the treasury income during the period.

 

“Treasury was a challenging segment this quarter, which resulted in lower treasury gains. On credit costs, total provisions in Q2 stood at approximately Rs 914 crore, compared to around Rs 1,800 crore in the previous quarter. As you know, Kisan Credit Card (KCC) provisions are made on a six-monthly basis. These were taken in the first quarter, with no corresponding provision required in the current quarter. That has been the primary reason for the lower provisioning this time,” said Sandeep Batra, ED, ICICI Bank.

 

 

Provisions for the quarter fell to Rs 914 crore, down from Rs 1,233 crore in Q2FY25. Meanwhile, treasury income fell to Rs 220 crore from Rs 680 crore a year earlier, due to the impact of rising bond yields on investment portfolios.

 

Core operating profit of the bank grew by 6.5 per cent Y-o-Y to Rs 17,078 crore.

 

Net interest income rose by 7.4 per cent Y-o-Y to Rs 21,529 crore, driven by a 10.6 per cent growth in the domestic loan portfolio. The bank's net interest margin remained steady at 4.30 per cent.  

 

Non-interest income, excluding treasury gains, increased by 13.2 per cent to Rs 7,356 crore. Fee income rose 10.1 per cent to Rs 6,491 crore, with approximately 78 per cent contributed by retail, rural, and business banking customers.

 

“Over the medium term, we do expect credit costs to move up and normalise. This quarter has been somewhat exceptional in that regard, especially when you consider the level of provisions relative to our core operating profits,” said Batra.

 

The gross non-performing asset (NPA) ratio improved to 1.58 per cent from 1.97 per cent a year earlier, while the net NPA ratio declined to 0.39 per cent from 0.42 per cent.

 

Gross NPA additions during the quarter were Rs 5,034 crore, compared to Rs 5,073 crore in the same period last year.

 

Recoveries and upgrades, excluding write-offs and asset sales, totalled Rs 3,648 crore. Net additions to gross NPAs stood at Rs 1,386 crore.

 

The bank wrote off NPAs worth Rs 2,263 crore during the quarter. The provisioning coverage ratio on non-performing loans was 75 per cent.

 

Total advances stood at Rs 14.08 trillion as of September 30, 2025, marking a 10.3 per cent year-on-year increase. Average deposits grew by 9.1 per cent to Rs 15.57 trillion, while total period-end deposits rose 7.7 per cent to Rs 16,12,825 crore.

 

Within the loan book, retail loans accounted for 52.1 per cent of total advances and grew by 6.6 per cent, while business banking loans grew by 24.8 per cent. The corporate loan portfolio registered a growth of 3.5 per cent, whereas the rural loan segment declined by 1.3 per cent.

 

The average CASA ratio during the quarter was 39.2 per cent. Average current account deposits rose by 12.6 per cent, and savings account deposits increased by 8.5 per cent.

 

As of the end of the quarter, the bank’s capital adequacy ratio stood at 17 per cent, and the CET-1 ratio was 16.35 per cent.