ICICI Bank reported a 20.1% year-on-year (YoY) increase in standalone profit after tax (PAT) to ₹14,843 crore in Q2 FY27, while net interest income (NII) rose 17.7% to ₹25,339 crore. The ICICI Bank Q2 FY27 Results, for the quarter ended 30 September 2026, reflected strong fee income, controlled operating expenses and improving asset quality. However, net interest margin (NIM) declined to 4.18% from 4.36% in Q1 FY27, making margin recovery a key factor to monitor in the coming quarters.
Consolidated PAT increased 22.3% YoY to ₹16,333 crore, supported by the bank's broader financial services businesses. While loan growth remained strong, investors need to distinguish between headline advances growth of 30% and underlying growth of 24.1%, excluding international-branch loans linked to FCNR(B) deposits.
Table of Contents
- ICICI Bank Q2 FY27 Results at a Glance
- ICICI Bank Q2 FY27 Net Profit and Earnings Drivers
- Net Interest Margin: Why NIM Declined
- Loan Growth and Advances Mix
- Deposit Growth and CASA Ratio
- Asset Quality and NPAs
- Capital Adequacy and Financial Strength
- ICICI Bank Subsidiary Performance
- Stock Performance and Brokerage Views
- What Investors Should Watch Next
- ICICI Bank Q2 FY27 Results Analysis: Investor Verdict
ICICI Bank's Q2 FY27 performance showed strong growth in earnings and core banking income. Lower provisions and moderate expense growth also supported profitability, although the sequential decline in NIM remained a key concern.
The following figures summarise the ICICI Bank Q2 Results for the quarter ended 30 September 2026.
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Particulars
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Q2 FY27 performance
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Standalone profit after tax
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₹14,843 crore
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Consolidated profit after tax
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₹16,333 crore
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Net interest income (NII)
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₹25,339 crore
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Net interest margin (NIM)
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4.18%
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Non-interest income, excluding treasury
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₹8,277 crore
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Fee income
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₹7,795 crore
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Operating expenses
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₹12,811 crore
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Provisions, excluding tax
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₹851 crore
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Profit before tax
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₹19,724 crore
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Core operating profit
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₹20,805 crore
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Year-on-Year Comparison
The ICICI Bank Q2 FY27 Report indicates that earnings growth was supported by higher interest income, fee income and operating efficiency.
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Metric
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YoY change
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Standalone PAT
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+20.1%
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Consolidated PAT
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+22.3%
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Net interest income
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+17.7%
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Non-interest income, excluding treasury
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+12.5%
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Fee income
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+20.1%
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Operating expenses
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+8.5%
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Profit before tax
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+20.4%
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Core operating profit
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+21.8%
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Important distinction: ICICI Bank's standalone PAT was ₹14,843 crore, while its consolidated PAT was ₹16,333 crore. These figures represent different reporting scopes and should not be used interchangeably when discussing the bank's Q2 FY27 earnings.
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ICICI Bank's standalone profit before tax increased 20.4% YoY to ₹19,724 crore, while core operating profit rose 21.8% to ₹20,805 crore. Profit before tax excluding treasury increased 23.4% to ₹19,954 crore.
These figures indicate that the improvement in profitability was primarily supported by core banking operations rather than favourable treasury movements.
1. Net Interest Income Grew 17.7%
Net interest income increased from ₹21,529 crore in Q2 FY26 to ₹25,339 crore in Q2 FY27.
NII represents the difference between the interest a bank earns on loans and other interest-bearing assets and the interest it pays on deposits and borrowings.
The increase reflects strong growth in the bank's lending business. However, lower NIM partially offset the benefit of higher advances, showing that loan growth alone does not determine interest earnings.
2. Fee Income Supported Revenue Diversification
Fee income increased 20.1% YoY to ₹7,795 crore from ₹6,491 crore.
Retail, rural and business banking customers contributed approximately 75% of total fee income. This indicates that the bank's fee-generating activities are spread across several customer segments rather than being concentrated in a single business category.
Non-interest income, excluding treasury, grew 12.5% to ₹8,277 crore.
Fee income is important because it provides a source of revenue beyond the interest earned on loans. Sustained growth in these income streams can support profitability when lending margins face pressure.
3. Operating Expenses Grew More Slowly Than Lending
Operating expenses increased 8.5% YoY to ₹12,811 crore from ₹11,807 crore.
Expense growth was substantially slower than the bank's 30% headline advances growth. This helped support operating leverage, whereby income and business expansion can translate into stronger profitability without expenses increasing at the same pace.
Investors should continue tracking whether ICICI Bank can maintain this cost discipline while expanding its branch network and lending operations.
4. Lower Provisions Supported Profitability
Provisions, excluding tax, declined to ₹851 crore from ₹914 crore in Q2 FY26.
Lower provisions supported reported earnings. However, provisions in an individual quarter can be influenced by recoveries, write-offs and the timing of specific credit costs. Investors should therefore evaluate this figure alongside normalised credit costs and asset-quality trends.
5. Treasury Loss Partially Offset Operating Strength
ICICI Bank recorded a treasury loss of ₹230 crore in Q2 FY27, compared with a treasury gain of ₹220 crore in Q2 FY26 and a gain of ₹151 crore in Q1 FY27.
The loss was mainly attributed to market movements.
This difference matters because treasury performance can fluctuate independently of the underlying lending and fee-income businesses. The bank's growth in core operating profit despite the treasury loss reinforces the importance of assessing operating performance separately from market-linked income.
Net interest margin was the main area of weakness in the ICICI Bank Q2 FY27 Results Analysis. NIM measures the net interest income generated relative to interest-earning assets and helps investors assess how effectively a bank earns from its balance sheet.
ICICI Bank's NIM declined both sequentially and year-on-year.
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Period
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Net interest margin
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Q2 FY26
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4.30%
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Q1 FY27
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4.36%
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Q2 FY27
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4.18%
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The Q2 FY27 NIM of 4.18% was 12 basis points lower than the 4.30% reported a year earlier and 18 basis points below the previous quarter's 4.36%.
However, Q1 FY27 included an interest-on-tax-refund benefit. Excluding that benefit, the previous quarter's NIM was 4.28%, making the comparable sequential decline 10 basis points.
What Caused the Margin Pressure?
The pressure was linked to FCNR(B) deposit inflows and the associated funding mix. These inflows contributed to strong deposit growth but also affected the composition and cost of funding.
According to Nirmal Bang's results review, FCNR-related processing fees broadly offset the cost of wholesale funding raised to support FCNR-linked lending.
This suggests that the funding arrangement's economics should be assessed beyond NIM alone. Nevertheless, the decline in NIM remains important because persistent margin compression can limit the benefit of further loan growth.
What NIM Means for Investors
Investors should monitor three developments:
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Funding costs: Whether the cost associated with FCNR(B) deposits moderates.
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Loan deployment: Whether deposits are deployed into higher-yielding retail and business banking assets.
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Margin recovery: Whether NIM stabilises or improves in subsequent quarters.
The current decline does not, by itself, indicate deterioration in credit quality. However, continued margin pressure could affect earnings growth even if advances continue to expand.
ICICI Bank's total advances increased 30% YoY to ₹18,31,580 crore at the end of Q2 FY27. Sequential growth was 12.3%.
However, headline advances growth included international-branch loans against FCNR(B) deposits. Excluding these loans, advances grew 24.1% YoY and 7.3% sequentially.
The adjusted figures provide a more representative view of the bank's underlying credit expansion.
Segment-Wise Loan Growth
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Loan category
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YoY growth
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Total advances
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30.0%
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Advances excluding FCNR(B)-linked international loans
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24.1%
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Retail and rural
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14.8%
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Business banking
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33.8%
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Domestic corporate
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30.6%
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Domestic advances
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22.8%
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Sequential growth in these categories was as follows:
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Loan category
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Sequential growth
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Total advances
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12.3%
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Advances excluding FCNR(B)-linked international loans
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7.3%
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Retail and rural
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3.2%
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Business banking
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11.1%
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Domestic corporate
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10.4%
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Domestic advances
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6.8%
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Retail and rural loans accounted for 51.6% of total advances, making them the largest segment of the bank's loan book.
What the Loan Mix Indicates
The growth pattern highlights different trends across ICICI Bank's lending segments.
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Business banking: Growth of 33.8% YoY indicates strong expansion in lending to businesses.
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Domestic corporate: Advances increased 30.6%, supporting overall credit growth.
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Retail and rural: Growth of 14.8% was slower than that of business banking and corporate lending, although this segment remained the largest share of the loan book.
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Domestic advances: Growth of 22.8% shows continued expansion in domestic lending.
The mix is constructive from a growth perspective, but investors should not interpret faster corporate lending as automatically equivalent to higher profitability. Loan yields, funding costs, credit quality, and capital usage also affect returns.
Retail and rural loan growth will be particularly important to monitor because these loans represented 51.6% of advances. Investors should track whether this segment's growth improves without an increase in delinquencies or credit costs.
ICICI Bank's total period-end deposits increased 27.1% YoY to ₹20,49,874 crore, with sequential growth of 11.8%.
Excluding FCNR(B) deposits, growth was lower at 17% YoY and 3.1% sequentially. This difference indicates that FCNR(B) inflows contributed meaningfully to the headline increase in deposits.
Deposit Performance
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Deposit metric
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Q2 FY27 performance
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Total period-end deposits
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₹20,49,874 crore
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YoY growth in period-end deposits
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27.1%
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Sequential growth in period-end deposits
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11.8%
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YoY deposit growth excluding FCNR(B)
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17.0%
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Sequential deposit growth excluding FCNR(B)
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3.1%
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Average deposits
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₹18,88,219 crore
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YoY growth in average deposits
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21.2%
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YoY growth in average CASA deposits
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10.7%
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Average CASA ratio
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35.8%
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CASA refers to current account and savings account deposits. These deposits are an important part of a bank's funding mix, while term deposits have different interest-cost characteristics.
Why the CASA Ratio Matters
The average CASA ratio was 35.8%. It declined because term deposits increased following FCNR(B) inflows.
Strong deposit growth supports the bank's ability to fund lending. However, the composition of those deposits matters because a greater reliance on higher-cost term funding can put pressure on NIM.
Investors should therefore assess deposit growth alongside:
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Retail CASA growth and the average CASA ratio.
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The share of FCNR(B)-linked and other term deposits.
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Deposit growth excluding FCNR(B) inflows.
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The bank's ability to deploy new funding into profitable lending opportunities.
Branch Network Expansion
ICICI Bank added 145 branches during H1 FY27, taking its network to 7,656 branches.
The bank also had 12,143 ATMs and cash-recycling machines.
The expansion increases the bank's physical distribution network. Investors should assess this alongside future customer acquisition, deposit growth, operating expenses and revenue generation.
Asset quality was one of the strongest positives in the ICICI Bank Q2 Results 2027. Both gross and net non-performing asset ratios declined compared with the previous quarter and the year-ago period.
An NPA is a loan on which the borrower has stopped meeting the required repayment conditions for a specified period under applicable banking rules. Lower NPA ratios generally indicate an improvement in the reported quality of a bank's loan portfolio.
Gross and Net NPA Ratios
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Asset-quality metric
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30 September 2026
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Gross NPA ratio
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1.20%
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Net NPA ratio
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0.30%
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Provisioning coverage ratio
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75.0%
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The historical comparison shows an improvement in reported asset quality.
Sep 2026
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Metric
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Sep 2026
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Gross NPA ratio
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1.20%
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Net NPA ratio
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0.30%
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Jun 2026
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Metric
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Jun 2026
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Gross NPA ratio
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1.38%
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Net NPA ratio
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0.35%
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Sep 2025
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Metric
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Sep 2025
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Gross NPA ratio
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1.58%
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Net NPA ratio
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0.39%
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The gross NPA ratio declined by 38 basis points YoY, while the net NPA ratio declined by 9 basis points.
These reductions indicate that a smaller proportion of the loan book was classified as non-performing compared with the corresponding period last year.
NPA Additions, Recoveries and Write-Offs
The movement in NPAs provides additional context beyond the headline ratios.
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Asset-quality measure
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Q2 FY27
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Gross NPA additions
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₹4,833 crore
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Recoveries and upgrades, excluding write-offs and sales
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₹3,620 crore
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Net additions to gross NPAs
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₹1,213 crore
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Gross NPAs written off
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₹1,592 crore
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Gross NPA additions were slightly lower than the ₹5,034 crore recorded in Q2 FY26. Net additions to gross NPAs declined to ₹1,213 crore from ₹1,386 crore a year earlier.
The reduction in net additions, alongside lower NPA ratios, supports the view that reported credit quality improved during the quarter.
However, investors should assess these figures together with recoveries, write-offs and new slippages. Write-offs reduce the reported stock of NPAs, but they do not represent the same outcome as recovering the underlying loan amount.
Provisioning Buffers Remain Significant
ICICI Bank continued to maintain additional provisions beyond specific NPA provisions.
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Provisioning measure
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Amount
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Contingency provisions
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₹13,100 crore
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Total provisions other than specific NPA provisions
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₹23,815 crore
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Other provisions as a share of loans
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1.3%
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Additional standard-asset provision for an agricultural priority-sector portfolio
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₹1,283 crore
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The additional ₹1,283 crore standard-asset provision, directed by the Reserve Bank of India (RBI), will remain in place until the review of the agricultural priority-sector portfolio is complete.
These buffers provide additional protection against potential credit losses. Nevertheless, investors should continue to track new slippages, recoveries, provision requirements and normalised credit costs as the loan book expands.
ICICI Bank maintained a comfortable capital position at the end of September 2026. Capital adequacy measures the capital available to absorb potential losses relative to a bank's risk-weighted assets.
Capital Ratios
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Capital metric
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30 September 2026
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Total capital adequacy ratio
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16.68%
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Common Equity Tier 1 (CET-1) ratio
|
16.01%
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Minimum regulatory total capital adequacy requirement, as provided
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11.70%
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Minimum regulatory CET-1 requirement, as provided
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8.20%
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The bank's total capital adequacy ratio exceeded the stated minimum requirement by 4.98 percentage points, while its CET-1 ratio exceeded the stated minimum by 7.81 percentage points.
This capital buffer gives ICICI Bank capacity to support loan growth, absorb potential credit shocks, invest in subsidiaries and pursue inorganic opportunities without immediate pressure to raise equity.
During the quarter, the bank acquired an additional 2% stake in ICICI Prudential Life Insurance for ₹1,470 crore.
The acquisition represents a further investment in the bank's insurance business. Investors should consider the capital deployed alongside the subsidiary's earnings contribution and future performance.
ICICI Bank's consolidated results were stronger than its standalone performance. Consolidated PAT increased 22.3% YoY to ₹16,333 crore from ₹13,357 crore, while consolidated assets grew 22.6% YoY to ₹32,92,953 crore.
The consolidated figures reflect the broader group, including its financial services businesses.
Key Subsidiary Updates
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Subsidiary
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Q2/H1 FY27 performance
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ICICI Prudential Life Insurance
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H1 annualised premium equivalent (APE) of ₹4,935 crore; value of new business (VNB) of ₹1,283 crore; VNB margin of 26.0%; Q2 PAT of ₹374 crore
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ICICI Lombard
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Q2 gross direct premium income of ₹6,792 crore; combined ratio of 107.0%; Q2 PAT of ₹946 crore
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ICICI Prudential AMC
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Q2 PAT increased to ₹889 crore from ₹838 crore
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ICICI Securities
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Consolidated Q2 PAT increased to ₹439 crore from ₹425 crore
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ICICI Home Finance
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Q2 PAT increased to ₹220 crore from ₹203 crore
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ICICI Prudential Life Insurance
ICICI Prudential Life Insurance reported H1 FY27 annualised premium equivalent of ₹4,935 crore and VNB of ₹1,283 crore. Its VNB margin improved to 26%, while Q2 PAT stood at ₹374 crore.
VNB measures the expected economic value generated by new insurance business, while the VNB margin indicates that value relative to the relevant new-business premium measure.
The improvement in VNB margin suggests better new-business economics during the reported period. Investors should continue tracking premium growth, profitability and margins to assess the sustainability of this performance.
ICICI Lombard
ICICI Lombard reported Q2 gross direct premium income of ₹6,792 crore and PAT of ₹946 crore.
However, its combined ratio worsened to 107% from 105.1%. The combined ratio measures claims and operating expenses relative to premiums. A ratio above 100% indicates that underwriting costs exceed premium income before considering other income sources.
The quarter included catastrophe losses of ₹118 crore. Investors should monitor whether the combined ratio improves, as sustained underwriting pressure could affect the quality of earnings even when premium income and reported PAT grow.
ICICI Prudential AMC, ICICI Securities and ICICI Home Finance
The other reported subsidiaries also recorded year-on-year profit growth:
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ICICI Prudential AMC's Q2 PAT increased to ₹889 crore from ₹838 crore.
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ICICI Securities' consolidated Q2 PAT increased to ₹439 crore from ₹425 crore.
-
ICICI Home Finance's Q2 PAT increased to ₹220 crore from ₹203 crore.
These businesses contribute to the group's earnings beyond traditional banking. Their continued performance will influence consolidated profit growth and the valuation investors assign to the broader financial services group.
ICICI Bank shares gained following the results. Business Standard reported that the stock was trading 0.67% higher at ₹1,406 on the NSE in early trade on 19 October 2026, while the Nifty 50 was broadly flat.
Brokerage commentary highlighted the bank's earnings growth, operating performance and asset quality, while the margin trajectory remained an important consideration.
Elara Capital's View
Elara Capital maintained a Buy rating and assigned a sum-of-the-parts target price of ₹1,720 per share.
The valuation included ₹219 per share from subsidiaries. The brokerage cited strong execution, healthy growth and controlled asset quality.
A sum-of-the-parts valuation assesses the value of different business segments separately before combining them to estimate an overall value.
Nirmal Bang's View
Nirmal Bang also maintained a Buy rating but revised its target price to ₹1,840 per share.
Its valuation comprised:
The brokerage highlighted reported credit costs of 20 basis points, while estimating normalised credit costs at approximately 50 basis points after adjusting for one-off corporate recoveries, FCNR-linked standard-asset provisions and seasonal Kisan Credit Card (KCC) provisioning.
This distinction is important because reported credit costs can be lower than an estimate of normalised costs when one-off factors influence the quarter.
Investor note: Brokerage ratings and target prices are estimates based on assumptions about earnings, risk and valuation. They are not guaranteed outcomes or personalised investment advice. Investors should evaluate these estimates alongside their own assessment of growth, margins, asset quality and valuation.
The ICICI Bank Q2 FY27 earnings report presents a combination of strong operating growth and improving asset quality, alongside pressure on interest margins. The following indicators will help investors assess whether the performance can be sustained.
1. Net Interest Margin Trajectory
NIM declined to 4.18% in Q2 FY27. Investors should monitor whether it stabilises or recovers as FCNR(B)-related funding dynamics change and the bank deploys deposits into higher-yielding assets.
A further decline could limit the benefit of advances growth.
2. Deposit Mix and CASA Growth
Deposit growth excluding FCNR(B) was 17% YoY, below the headline growth of 27.1%. Average CASA growth was 10.7%, and the average CASA ratio stood at 35.8%.
The composition of incremental deposits will matter as much as their total value. Stronger retail CASA growth could help improve the funding mix, although the actual effect on margins will depend on deposit pricing and loan yields.
3. Retail and Rural Lending
Retail and rural advances grew 14.8% YoY and accounted for 51.6% of total loans.
Investors should track whether this segment's growth accelerates and whether asset quality remains stable. Faster growth is useful only if the associated credit risk and funding costs remain manageable.
4. Normalised Credit Costs
Provisions declined to ₹851 crore, while NPA ratios improved. However, Nirmal Bang estimated normalised credit costs at around 50 basis points compared with reported credit costs of 20 basis points.
Investors should monitor future slippages, recoveries, seasonal agricultural provisioning and the effect of one-off corporate recoveries on reported credit costs.
5. Corporate and Business Banking Exposure
Business banking and domestic corporate advances grew 33.8% and 30.6%, respectively.
These segments were important contributors to overall loan growth. Investors should assess whether the expansion translates into sustainable risk-adjusted returns, considering margins, funding costs and credit quality.
6. Treasury Volatility
ICICI Bank recorded a treasury loss of ₹230 crore in Q2 FY27, compared with gains in both the year-ago quarter and the previous quarter.
Future treasury movements could influence reported profitability. Core operating profit and treasury income should therefore be assessed separately when evaluating the underlying earnings trend.
7. Subsidiary Profitability
The performance of ICICI Prudential Life, ICICI Lombard, ICICI Prudential AMC, ICICI Securities and ICICI Home Finance will remain relevant to consolidated earnings.
Investors should pay particular attention to life insurance VNB margins and ICICI Lombard's combined ratio, which worsened to 107%.
ICICI Bank delivered strong operating performance in Q2 FY27, with standalone PAT increasing 20.1% to ₹14,843 crore, NII rising 17.7% to ₹25,339 crore and core operating profit growing 21.8% to ₹20,805 crore. Consolidated PAT grew faster, increasing 22.3% to ₹16,333 crore.
The quarter's main strengths were:
- Strong growth in NII and fee income.
- Operating expenses growing more slowly than headline advances.
- Improvement in gross and net NPA ratios.
- Substantial provisioning buffers.
- Comfortable capital adequacy.
- Growth across several financial services subsidiaries.
The principal concern was the decline in NIM to 4.18%, linked to FCNR(B)-related funding dynamics. Investors should also distinguish between headline loan growth of 30% and adjusted growth of 24.1%, excluding FCNR(B)-linked international loans.
For long-term investors, the results highlight a well-capitalised bank with strong earnings growth and improving reported asset quality. However, the sustainability of that growth will depend on its ability to manage funding costs, maintain margins, expand retail lending and keep credit costs under control.
For investors assessing the next one or two quarters, NIM recovery, deposit composition, normalised credit costs and subsidiary performance are the key variables to monitor. The results are encouraging overall, but continued earnings growth will depend on balancing rapid credit expansion with funding efficiency and risk management.
Also read the ICICI Bank Q1 FY27 Results Analysis to understand the operating trends entering Q2 FY27, including profitability, interest margins, deposit growth and credit quality, and assess how these factors changed during the latest quarter.
Frequently Asked Questions
1. What was ICICI Bank's Q2 FY27 net profit?
ICICI Bank reported standalone profit after tax of ₹14,843 crore in Q2 FY27, an increase of 20.1% from ₹12,359 crore in Q2 FY26. Consolidated PAT rose 22.3% YoY to ₹16,333 crore.
2. What was ICICI Bank's NII in Q2 FY27?
ICICI Bank's net interest income increased 17.7% YoY to ₹25,339 crore in Q2 FY27 from ₹21,529 crore in the year-ago quarter. Growth was supported by lending expansion, although lower NIM partially offset the benefit.
3. Why did ICICI Bank's NIM decline in Q2 FY27?
ICICI Bank's NIM declined to 4.18% from 4.36% in Q1 FY27 and 4.30% in Q2 FY26. The pressure was linked to FCNR(B) deposit inflows and the associated funding mix. Excluding the previous quarter's interest-on-tax-refund benefit, the sequential decline was 10 basis points.
4. What was ICICI Bank's asset quality in Q2 FY27?
ICICI Bank's gross NPA ratio declined to 1.20% as of 30 September 2026 from 1.38% in June 2026 and 1.58% in September 2025. Its net NPA ratio fell to 0.30%, while the provisioning coverage ratio stood at 75%.
5. What should investors watch after ICICI Bank's Q2 FY27 results?
Investors should monitor NIM recovery, retail CASA growth, deposit composition, retail loan growth, normalised credit costs and treasury performance. The performance of ICICI Prudential Life and ICICI Lombard is also important for assessing consolidated earnings growth.