MUMBAI: The second largest lender ICICI Bank has reported a 4% on-year decline in standalone net profit to Rs 11,318 crore for the three months ending December, down from Rs 11,792.4 crore in the same quarter last year. The overall numbers were weighed down by one-time Rs 1,283-crore provisions on its agri book on earnings following an RBI inspection, even as net interest income rose and the overall asset quality improved during the quarter.
On a consolidated basis too, the bank group saw its bottom line shrinking marginally with the consolidated net income falling to Rs 12,538 crore from Rs 12,883 crore even as consolidated assets grew 8.8% to Rs 27.53 trillion from Rs 25.31 trillion.
The bank management led by the chief executive Sandeep Bakhshi and executive director Sandeep Batra said the net interest income for the period grew 7.7% and the overall asset quality was better with lower NPA ratios but provisions surged to Rs 2,556 crore, impacting quarterly profit. This included a one-time provision of Rs 1,283 crore for its agri book, which was tagged as priority sector lending, but the RBI did not accept that classification, they added.
The issue, they explained, belongs a period from 2012 and covers fully secured agri book in the form of terms loans running into around Rs 25,000 crore.
“We have made an additional standard asset provision of Rs 1,283 crore, pursuant to the Reserve Bank’s annual supervisory review, in respect of a portfolio of agricultural priority sector credit facilities where the terms were found not to be fully compliant with regulatory requirements for classification as agricultural priority sector lending.
“There is no change in asset classification or in the terms and conditions applicable to the borrowers or in the repayment behaviour of borrowers as per these terms. This additional standard asset provision will continue until the loans are repaid or renewed in conformity with the PSL classification guidelines.
“We are correcting the same to meet the regulatory demand. But all we want to reassert is that the whole book is standard and there is no stress in them nor there is any need for any regulatory provisions,” they said.
The core profitability gauge net interest income increased 7.7% to Rs 21,932 crore from Rs 20,371 crore in Q3FY25, while net interest margin was 4.30% in the quarter, up from 4.25% in the year-ago period and 4.30% in the previous quarter.
Ahead of the results, the bank shares fell 0.4% on Friday to end at Rs 1,413. The stock has gained over 15% in the last one year, outperforming benchmark Nifty, which has returned less than 11% during the same period.
Operating expenses rose 13.2% on-year to Rs 11,944 crore from Rs 10,552 crore, which the bank explained includes Rs 145 crore of additional provisions towards the new labour codes. Treasury losses also weighed on the quarter, with a treasury loss of Rs 157 crore, compared to a gain of Rs 371 crore a year ago.
Core operating profit grew 6% to Rs 17,513 crore, reflecting steady growth in net interest income and fee income.
Asset quality also improved marginally, with the gross NPA ratio printing in at 1.53 compared to 1.58 in September 2025 and 1.96 a year earlier. Gross NPAs fell to Rs 23,758 crore from Rs 27,745 crore a year ago.
The net NPA ratio also declined marginally to 0.37 from 0.39 in September 2025 and 0.42 in December 2024, Batra said, adding provisions (excluding for tax) rose to Rs 2,556 crore from Rs 1,227 crore in Q3FY25 and this includes the one-time additional standard asset provision of Rs 1,283 crore towards the above-said agri book.
Domestic loans grew 11.5% to Rs 14.31 trillion while average deposits grew 8.7% to Rs 15.86 trillion of which average current account and savings account (Casa) ratio was 39% and the total period-end deposits grew 9.2% to Rs 16.59 trillion.
Including profits for the nine months, total capital adequacy ratio was 17.34 and CET-1 ratio was 16.46, on a standalone basis.