IBN Q2 Earnings Rise Y/Y on Higher NII & Fee Incom, Stock Falls 5.9%

ICICI Bank Ltd.’s IBN profit after tax for second-quarter fiscal 2026 (ended Sept. 30, 2025) was INR123.6 billion ($1.42 billion), up 5.2% from the prior-year quarter.

Results benefited from growth in net interest income (NII) and non-interest income, along with lower provisions. The loan balance increased sequentially, which was another tailwind. However, an increase in expenses was the undermining factor. Probably, because of this, shares of the company lost 5.9% following the earnings release.

IBN’s NII & Fee Income Improve, Expenses Rise

NII grew 7.4% year over year to INR215.3 billion ($2.47 billion). The net interest margin was 4.30%, up 3 basis points.

Non-interest income was INR73.6 billion ($843 million), growing 13.2% year over year. Fee income increased 10.1% year over year to INR64.9 billion ($743.2 million).

In the reported quarter, IBN recorded treasury income of INR2.20 billion ($25.2 million), plummeting 67.6% year over year.

Operating expenses totaled INR118.1 billion ($1.35 billion), up 12.4% year over year.

ICICI Bank’s Loans & Deposits Increase

As of Sept. 30, 2025, ICICI Bank’s total advances were INR14,084.6 billion ($158.6 billion), up 3.2% sequentially. Growth was primarily driven by a solid rise in retail loans, business banking loans, and domestic corporate and other loans.

Total deposits increased marginally on a sequential basis to INR16,128.3 billion ($181.6 billion).

IBN’s Credit Quality Improves

As of Sept. 30, 2025, the net non-performing assets (NPA) ratio was 0.39%, which declined from 0.42% in the prior-year period. Recoveries and upgrades (excluding write-offs and sales) of NPAs were INR36.48 billion ($417.7 million) in the reported quarter.

In the reported quarter, there were net additions of INR13.86 billion ($158.7 million) to gross NPA. Gross NPA additions were INR50.34 billion ($576.5 million), while gross NPA written-off was INR22.63 billion ($259.1 million).

Provisions (excluding provision for tax) decreased 25.9% year over year to INR9.14 billion ($104.7 million).

Capital Ratios Strong for ICICI Bank

In compliance with the Reserve Bank of India's guidelines on Basel III norms, ICICI Bank's total capital adequacy was 17.00%. Tier-1 capital adequacy was 16.35% as of Sept. 30, 2025. Both ratios were well above the minimum requirements.

Our Take on IBN

Elevated expenses due to ICICI Bank’s initiatives to digitize banking operations are expected to adversely impact bottom-line growth in the coming quarters. Weak credit quality is another near-term concern for the company.

ICICI Bank Limited Price, Consensus and EPS Surprise

 

ICICI Bank Limited price-consensus-eps-surprise-chart | ICICI Bank Limited Quote

ICICI Bank currently carries a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Earnings Release Dates of Other Foreign Banks

Barclays BCS is scheduled to announce quarterly numbers tomorrow.

The consensus estimate for BCS’ quarterly earnings has been unchanged at 54 cents per share over the past week. The figure implies a decline of 3.6% from the prior-year quarter’s actual.

Deutsche Bank AG DB is expected to report quarterly results on Oct. 29.

The Zacks Consensus Estimate for DB’s quarterly earnings has been unchanged at 81 cents per share over the past week. The figure implies a decline of 9% from the prior-year quarter.

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