IDBI Bank Q4 FY26 profit down 5%, NII rises

Key takeaway from the March-quarter print

IDBI Bank reported a 5% year-on-year decline in net profit for the March quarter of FY 2025-26 (Q4 FY26), even as core interest income metrics improved. The LIC-controlled lender posted profit of ₹1,943 crore versus ₹2,051 crore a year ago, according to PTI. Management attributed the softer bottom line to a decline in operating profit, which fell to ₹3,043 crore from ₹3,195 crore in the year-ago quarter.

Profit slips despite higher income

The March-quarter results showed a clear divergence between income growth and profitability. Total income increased to ₹9,409 crore in Q4 FY26 from ₹9,035 crore in Q4 FY25. Interest income rose to ₹7,798 crore from ₹6,979 crore in the corresponding quarter last year.

Despite these gains, operating profit declined year-on-year, which weighed on net profit for the quarter. The reported numbers suggest that while revenue momentum improved, operating performance did not translate into higher quarterly profit.

Net interest income improves in Q4 FY26

Net interest income (NII), a key banking metric that tracks the spread between interest earned and interest paid, improved in the quarter. IDBI Bank reported NII of ₹3,851 crore in Q4 FY26 versus ₹3,290 crore in Q4 FY25.

The improvement in NII alongside higher interest income indicates stronger core interest earnings in the March quarter compared with the year-ago period.

Asset quality trends: Gross NPA ratio improves

On asset quality, IDBI Bank reported improvement in gross non-performing assets (gross NPAs). The gross NPA ratio eased to 2.32% of gross advances as of March 31, 2026, compared with 2.98% at the end of March 2025.

Net NPAs remained flat at 0.15% of advances at the end of March 2026. The bank also reported a provision coverage ratio (including Technical Write-Offs) of 99.39% as of March 31, 2026, and said the ratio has remained consistently above 99% since September 2023.

Full-year FY26 performance stays strong

While Q4 profit dipped, full-year performance was stronger. For FY 2025-26, IDBI Bank’s net profit rose 27% to ₹9,513 crore compared with ₹7,515 crore in the previous year. Total income for the year increased to ₹35,744 crore from ₹33,826 crore in FY25.

The annual growth in profit, despite a softer March quarter, indicates that the bank delivered higher earnings over the full fiscal period.

Capital adequacy improves year-on-year

IDBI Bank reported an improvement in its capital adequacy ratio. The capital adequacy ratio rose to 26.65% as of March 31, 2026, from 25.05% as of March 31, 2025.

This higher capital buffer is a closely watched metric for bank balance-sheet strength, particularly in periods of credit growth and changing risk conditions.

Business growth snapshot from the December quarter

Separately, the bank had reported a total business of ₹547,000 crore (₹5.47 lakh crore) as of December 2025, up 12% year-on-year. This included deposits of ₹308,000 crore (₹3.08 lakh crore) and net advances of ₹239,000 crore (₹2.39 lakh crore).

The report also noted that, on a sequential basis, total business expanded from ₹547,000 crore as of December 2025, supported by growth in deposits and advances.

What the previous quarter showed (context)

For the third quarter, the bank’s performance was described as mixed. Net profit rose 1.4% year-on-year to ₹1,935.5 crore, while net interest income declined 24% to ₹3,209.5 crore.

Asset quality was stated to be stable in that period, with the net NPA ratio easing to 0.18%.

Key reported figures at a glance

Why the Q4 FY26 print matters for investors

The Q4 FY26 results underline how quarterly profit can move differently from core interest earnings. NII rose sharply year-on-year and interest income increased, but operating profit declined, resulting in a lower net profit.

At the same time, the bank reported improving asset quality, with the gross NPA ratio falling year-on-year and net NPAs staying low at 0.15%. For investors tracking state-linked lenders, the combination of low net NPAs, high provision coverage, and improved capital adequacy provides a clearer view of balance-sheet resilience.

Conclusion

IDBI Bank’s March-quarter FY26 net profit fell to ₹1,943 crore, primarily due to lower operating profit, even as total income and NII improved year-on-year. The bank ended FY26 with higher full-year profit of ₹9,513 crore and improved capital adequacy to 26.65%, alongside better gross NPA ratios as of March 31, 2026.