ICICI Bank reported a solid performance for the fourth quarter of FY26, supported by a sharp decline in provisions, steady loan growth, and continued improvement in asset quality.
The bank posted a net profit (PAT) of ₹13,701.68 crore, registering an 8.5% year-on-year increase. This growth came despite relatively modest pre-provision operating profit (PPOP) growth of 3.0% YoY, indicating that profitability was largely driven by lower credit costs.
A key highlight of the quarter was the sharp 89.2% YoY decline in provisions, which dropped to just ₹96.16 crore. This significant reduction in provisioning boosted profit before tax (PBT), which grew 7.9% YoY.
Asset quality continued to improve meaningfully. The gross NPA ratio declined to 1.40% from 1.67% YoY, while net NPA improved to 0.33% from 0.39%. On a sequential basis, GNPA also improved from 1.53% in the previous quarter, reflecting consistent strengthening of the loan book.
Credit cost for the quarter came in at approximately 37 basis points, significantly lower than the management’s guidance of around 50 basis points, effectively beating expectations by 26%.
Loan growth remained strong, with advances increasing 15.8% YoY. This marked an acceleration compared to 11.5% growth in Q3 and 10.6% in Q2, indicating improving credit demand.
The wholesale banking segment emerged as a key growth driver, delivering a robust 26.7% YoY increase in profit before tax, significantly outpacing its revenue growth of 7.3%.
Fee income also showed healthy traction, rising 7.5% YoY to ₹6,779 crore, reflecting steady core banking activity.
However, the quarter was not without challenges. Operating expenses rose sharply by 12.1% YoY to ₹12,088.95 crore, outpacing both net interest income growth of 8.4% and PPOP growth of 3.0%. This cost pressure weighed on overall operating efficiency.
Net interest margin (NIM) remained largely flat at 4.32%, indicating limited expansion in core lending profitability.
The treasury segment reported a loss of ₹106 crore during the quarter, compared to a gain of ₹239 crore in the same period last year, highlighting volatility in treasury operations.
The CASA ratio stood at 38.6%, indicating stable but moderate growth in low-cost deposits.
Return on assets (RoA) declined slightly to 2.40% from 2.52% YoY, reflecting the impact of rising operating expenses despite strong bottom-line growth.
On the capital front, the bank further strengthened its position, with capital adequacy improving to 17.18% from 16.55% YoY, providing a comfortable buffer for future growth.
Ahead of the results, market expectations had indicated a more moderate performance. Net interest income was estimated to grow 7.1% YoY to ₹22,704.2 crore, while net interest margin was expected to decline to 4.24% from 4.41%.
Provisions were projected to rise 65% YoY to ₹1,477.72 crore, and gross NPA was expected to improve slightly to 1.47% from 1.53% on a sequential basis. Profit was estimated to remain largely flat at ₹12,650.13 crore compared to ₹12,629.58 crore in the previous year.
However, the actual results surpassed expectations on key fronts, particularly in terms of sharply lower provisions and better-than-expected asset quality.
Overall, ICICI Bank delivered a strong and stable performance in Q4 FY26, with improving asset quality, controlled credit costs, and solid loan growth offsetting pressures from rising operating expenses and flat margins.
Disclaimer:
This article is for informational purposes only and should not be considered as investment advice. Investors are advised to consult certified financial advisors before making any investment decisions.
