ICICI Bank Reports 20.1% Profit Rise as Loans Grow 30% and Margin Narrows

ICICI Bank said profit before tax, excluding treasury results, rose 23.4% to INR 199.5 billion for the quarter ended Sept. 30, 2026, according to a Motley Fool transcript of its Oct. 17 earnings call.

Net interest margin, the gap between what a bank earns on loans and pays on deposits, slipped to 4.18% from 4.36% in the prior quarter.

MarketBeat reported that profit after tax grew 20.1% to INR 148.43 billion. Consolidated profit after tax rose 22.3% to INR 163.33 billion. A treasury loss of INR 2.3 billion replaced a gain of INR 2.2 billion a year earlier.

Deposits and Loans Surge

Total deposits rose 27.1% from a year earlier and 11.8% from the previous quarter. The bank raised about $18 billion in FCNR deposits, which are foreign-currency accounts held by non-resident Indians, through a Reserve Bank of India swap facility.

Without them, deposits grew 17% year over year.

Loans, including those booked at international branches, grew 30%. Excluding international-branch loans tied to the FCNR deposits, growth was 24.1%.

Domestic corporate loans rose 30.6% and business banking loans rose 33.8%. Retail and rural lending grew a slower 14.8%, with mortgages up 15.3% and personal loans up 16.6%.

Loans backed by gold jewelry climbed 79.4%, though quarter-on-quarter growth slowed to 4.5% after new regulatory guidelines. Credit-card balances fell 9.7%.

Why Margins Narrowed

Group CFO Anindya Banerjee said a larger share of overseas-branch assets and a big sequential jump in retail term deposits pulled margins down, according to the call transcript. Management said the full impact of the FCNR deposits would show in the third quarter.

MarketBeat reported that margins could recover in the fourth quarter as that effect fades.

The bank's cost of deposits was 4.50%, up from 4.41% in the prior quarter but below 4.64% a year earlier. Management also said interest rates on about 57% of its loans are linked to the repo rate and other external benchmarks.

Asset Quality and Capital

The net nonperforming asset ratio, which measures bad loans left after provisions, improved to 0.30% from 0.35% at June 30, 2026, and 0.39% a year earlier. Credit cost was 0.2% of average advances.

Management said a normal level, after adjusting for one-off items, is about 50 basis points (0.5 percentage point).

The bank holds INR 131 billion in contingency provisions, roughly 0.7% of total advances. Its common equity tier 1 ratio, a core measure of capital strength, was 16.01%. Fee income reached INR 78.0 billion, up 20.1%.

What It Means for US Investors

ICICI Bank's American depositary receipts trade on the New York Stock Exchange under the ticker IBN. Results are reported in Indian rupees. Margin pressure from the foreign-currency deposit inflow is the item management said would peak next quarter.