ICICI Bank Navigates Q2 FY26 with Robust Growth and Strategic Digital Push

ICICI Bank Limited has reported a strong performance for the second quarter of the fiscal year 2026, ending September 30, 2025, demonstrating resilience amidst evolving economic conditions. The Bank's strategic focus on a 360-degree customer-centric approach and leveraging opportunities across diverse ecosystems has yielded positive results. For Q2 FY26, the consolidated profit after tax grew by 3.2% year-on-year to 13,357 crore rupees. The profit before tax, excluding treasury, saw a notable increase of 9.1% year-on-year, reaching 16,164 crore rupees, while core operating profit rose by 6.5% year-on-year to 17,078 crore rupees. This performance underscores the Bank's disciplined execution and ability to generate sustainable returns.

The Bank's revenue streams showed healthy growth, with net interest income increasing by 7.4% year-on-year to 21,529 crore rupees. Non-interest income also contributed significantly, growing by 13.2% year-on-year, excluding treasury. This growth was primarily driven by a 10.1% year-on-year increase in fee income, reaching 6,491 crore rupees, with retail, rural, and business banking customers contributing approximately 78% of total fees. Dividend income from subsidiaries also saw a substantial year-on-year increase to 810 crore rupees, reflecting strong performance from its group companies. The Bank's Net Interest Margin (NIM) stood at 4.30% for the quarter, reflecting a balanced approach to pricing and funding costs.

Loan and Deposit Growth: A Balanced Approach

ICICI Bank demonstrated robust growth in both its loan and deposit portfolios. Average deposits grew by 9.1% year-on-year and 1.6% sequentially, reaching 15,57,449 crore rupees. Total period-end deposits increased by 7.7% year-on-year to 16,12,825 crore rupees. The domestic loan portfolio expanded by 10.6% year-on-year, with a sequential growth of 3.3%. The retail loan portfolio grew by 6.6% year-on-year, constituting 42.9% of the total portfolio. Mortgage loans, a significant component of retail, grew by 9.9% year-on-year, while credit card outstanding increased by 6.4%. The business banking portfolio was a standout performer, registering a strong 24.8% year-on-year growth and 6.5% sequentially, driven by increased formalization in the sector and the Bank's digital initiatives.

Asset quality continued to improve, with the Net NPA ratio declining to 0.39% at September 30, 2025, from 0.41% at June 30, 2025. The provision coverage ratio remained healthy at 75.0%. Net additions to gross NPAs were 1,386 crore rupees, a significant reduction from 3,034 crore rupees in the previous quarter. The Bank's total provisions for the quarter were 914 crore rupees, or 0.26% of average advances, reflecting healthy asset quality across segments. Contingency provisions stood at 13,100 crore rupees, providing a strong buffer. The capital position remains robust, with a Common Equity Tier 1 (CET-1) ratio of 16.35% and a total capital adequacy ratio of 17.00% at September 30, 2025.

Strategic Initiatives and Future Outlook

ICICI Bank is actively pursuing several strategic initiatives to drive future growth and enhance operational efficiency. The Bank launched 'iLens', an integrated, end-to-end retail lending solution designed to streamline the loan lifecycle from sourcing to disbursement. In business banking, growth is being propelled by leveraging digital platforms such as InstaBIZ, Merchant STACK, Trade Online, and DigiEase, which facilitate digital onboarding and process decongestion. The Bank is also committed to Environmental, Social, and Governance (ESG) initiatives, with a roadmap to become carbon neutral by FY2032 and the implementation of a digital tool for robust ESG data management.

Management expressed optimism for the second half of FY2026, anticipating better loan growth across segments, particularly in retail, supported by a resilient Indian economy and government policy measures. Net Interest Margins are expected to remain range-bound, with potential benefits from CRR cuts and repricing of term deposits. The Bank's focus on maintaining a strong balance sheet, prudent provisioning, and leveraging its digital capabilities positions it well for sustained, risk-calibrated profitable growth. The emphasis on 'Fair to Customer, Fair to Bank', 'One Bank, One Team', and 'Return of Capital' continues to guide its operations, ensuring long-term value creation for shareholders.

Concluding Thoughts: Disciplined Growth Ahead

ICICI Bank's Q2 FY26 performance reflects a strategy of disciplined growth, strong asset quality management, and a forward-looking approach to digital transformation and sustainability. The Bank's ability to maintain robust capital ratios while expanding its loan book, particularly in high-growth segments like business banking, highlights its operational strength. With a clear strategic roadmap and continued investment in technology and customer-centric solutions, ICICI Bank is well-positioned to capitalize on India's economic growth trajectory and deliver consistent returns to its stakeholders.