ICICI Bank’s net profit for the first quarter ended June 2025 rose 15.5% to Rs 12,768 crore, beating street estimates of Rs 11,985 crore. The rise in profit was due to higher income and stable asset quality. On a sequential basis (QoQ), the bottom line rose merely 1%.
Margins remain firm
The net interest income (NII) of the bank rose 10.6% to Rs 21,635 crore in Q1FY26, with other income jumping 21.5% for the quarter. The net interest margin (NIM) increased to 4.34% in the quarter ended June, but is down 7 basis points from the March 2025 quarter ending of 4.41%. “Margins are expected to compress a little more in the next quarter,” said the bank’s management in the post-earnings call, adding, “It also depends on RBI’s action and liquidity in the system.”
Asset quality improves
For Q1FY26, the asset quality improved with the gross NPA declining to 1.67% from 2.15% in the year-ago quarter. Net NPA ratio also fell to 0.41% from 0.43% on a YoY basis. Sequentially, both gross and net NPA ratios remained stable. The gross NPA additions rose to Rs 6,245 crore in Q1FY26, compared to Rs 5,916 crore in the year-ago period. Recoveries and upgrades of NPAs, excluding write-offs and sale, were Rs 3,211 crore in Q1FY26 compared to Rs 3,292 crore in Q1FY25.
The net additions to gross NPAs, excluding write-offs and sale, were Rs 3,034 crore in Q1FY26 compared to Rs 2,624 crore in Q1FY25. The bank has written off gross NPAs amounting to Rs 2,359 crore in Q1FY26. Provisions rose 36% to Rs 1,815 crore. As of June 30, the provisioning coverage ratio on non-performing loans was 75.3%.
Domestic loan book for the bank in Q1FY26 grew 12% YoY to Rs 13.31 lakh crore. Within this, the business banking book grew 29.7%, while retail grew 6.9% and the domestic corporate book rose 7.5%. On the other hand, the rural loan book fell marginally by 0.4%. The retail loans grew 6.9% on year to Rs 7.21 lakh crore, within which personal loans and credit card loans grew merely over 1%.
The total deposits of the bank grew 12.8% to Rs 16.09 lakh crore for the quarter ended June 30. Within deposits, the current account and savings account deposits grew 13.6% on year to Rs 6.62 lakh crore and term deposits grew 12.8% on year. The CASA ratio stood at 41.2%.
The bank’s total capital adequacy ratio as on June 30 was 16.97% and common equity tier-I capital ratio was 16.31% compared to the minimum regulatory requirements of 11.70% and 8.20%, respectively. The bank issued Basel III-compliant Tier 2 bonds amounting to Rs 1,000 crore during April-June.
The board of the bank has approved the acquisition of 100% stake in ICICI Prudential Pension Funds Management to make it a wholly-owned subsidiary for Rs 203.5 crore, subject to approvals from RBI, PFRDA and other regulators. The transaction is expected to the completed within a year.