ICICI Bank Q1 results: Net profit rises 15.5% YoY at ₹12,768 crore

Mumbai, July 19, 2025:
India's second-largest private lender, ICICI Bank, on Saturday reported a 15.5% year-on-year (YoY) rise in its standalone net profit to ₹12,768 crore for the quarter ended June 30, 2025 (Q1 FY26), compared to ₹11,045 crore in the same quarter last year. The bank's solid financial results were fueled by higher net interest income, controlled provisioning, and strong growth in its retail loan portfolio.

Key Highlights of ICICI Bank Q1 FY26 Results:

• Net Profit (YoY): ₹12,768 crore, up 15.5%

• Net Interest Income (NII): ₹20,948 crore, up 8.1%

• Net Interest Margin (NIM): 4.3% vs 4.78% in Q1 FY25

• Provisions: ₹628 crore, down from ₹1,292 crore YoY

• Gross NPA Ratio: 2.73% vs 2.76% QoQ

• Net NPA Ratio: 0.42% vs 0.44% QoQ

• Loan Book Growth: 16.1% YoY

Retail and SME Lending Power Growth

The bank's loan book continued to grow steadily, with domestic advances rising 16.1% YoY, led by a 21.9% increase in retail loans and a 24.5% jump in SME loans. Retail now contributes over 55% of the total loan portfolio. Mortgage loans, auto loans, and credit cards saw robust traction during the quarter.

Corporate loans also grew at a healthy pace of 10.5% YoY, reflecting improving credit demand from India Inc.

Asset Quality Improves; Credit Cost Eases

ICICI Bank reported a slight improvement in asset quality, with gross non-performing assets (GNPA) at 2.73%, compared to 2.76% in the previous quarter. Net NPAs declined marginally to 0.42%.

The bank's credit cost for the quarter was 0.33%, a significant improvement from 0.53% in Q1 FY25. Total provisions decreased to ₹628 crore from ₹1,292 crore in the same quarter last year.

"This quarter reaffirms our prudent risk management and diversified lending approach. We continue to improve our underwriting frameworks and maintain healthy provisioning buffers," said Sandeep Batra, Executive Director, ICICI Bank.

Net Interest Income Grows; Margins Under Pressure

The bank’s Net Interest Income (NII) rose by 8.1% YoY to ₹20,948 crore from ₹19,098 crore in Q1 FY25, but on a sequential basis, it remained flat. The Net Interest Margin (NIM) moderated to 4.3% compared to 4.78% last year, reflecting a shift in deposit mix and competitive loan pricing.

According to Rajnish Kumar, banking analyst at Nuvama Institutional Equities, “While NIMs are slightly under pressure due to rising cost of funds and slower re-pricing on the asset side, the growth in volumes and lower slippages offer a strong cushion to earnings.”

Fee Income and Operating Performance

Fee income rose 12% YoY to ₹5,150 crore, aided by card fees, wealth management, and distribution income. Operating expenses grew by 13% YoY to ₹10,640 crore, primarily due to branch expansions, digital investments, and hiring.

The cost-to-income ratio stood at 38.5%, compared to 36.7% in Q1 FY25. Despite this, Pre-Provision Operating Profit (PPOP) rose 7.4% YoY to ₹15,685 crore.

Capital Adequacy and Liquidity

ICICI Bank continues to maintain a healthy capital base, with the Capital Adequacy Ratio (CAR) under Basel III norms at 17.8%, of which Tier 1 capital stood at 16.3%.

The liquidity coverage ratio (LCR) for the quarter was 124%, ensuring ample liquidity to support credit growth and navigate any funding stress scenarios.

Analyst Views: Positive Long-Term Outlook

Brokerages remain bullish on ICICI Bank, citing its superior asset quality, strong retail footprint, digital transformation initiatives, and stable leadership.

“ICICI Bank has consistently delivered industry-leading return metrics. Its strong franchise, healthy balance sheet, and tech-led initiatives position it well in a structurally positive banking cycle,” said Amish Shah, Head of Research at Bank of America Securities India.

Motilal Oswal Financial Services retained a "Buy" rating on the stock with a target price of ₹1,420, noting the bank’s improving return on assets (ROA) and return on equity (ROE), which stood at 2.4% and 19.7%, respectively, for the quarter.

Investor Outlook: What to Watch Ahead

ICICI Bank’s stock has gained around 11% year-to-date, outperforming the Bank Nifty index. As of the last trading session, the stock closed at ₹1,268 on the NSE.

Going forward, investors will closely monitor the bank’s ability to maintain loan growth momentum, protect margins amid deposit repricing, and continue to keep asset quality in check.

With India's credit cycle in an expansionary phase, ICICI Bank appears well-placed to sustain its earnings trajectory in FY26. Analysts also expect the bank to benefit from operating leverage as it expands its digital offerings and lowers its incremental cost of customer acquisition.