ICICI Bank Q3 profit slips 2.68 pc to Rs 12,538 cr, dragged by RBI-mandated provisions

Mumbai, Jan 17 (PTI) ICICI Bank consolidated profit for the December quarter declined 2.68 per cent to Rs 12,537.98 crore, hit by an RBI-mandated Rs 1,283-crore provision for agricultural loans wrongly classified as priority sector advances.

On a standalone basis, the country's second-largest lender reported an over 4 per cent decline in the October-December profit at Rs 12,883 crore.

The bank also announced that its board has decided to extend Managing Director and Chief Executive Sandeep Bakhshi's term by two years, a surprising move given the usual practice of top leadership at banks getting three-year extensions.

Its Executive Director Sandeep Batra elaborated on the RBI's action and added that if not for that, the bank's standalone net profit would have shown a 4 per cent increase.

Batra said ICICI Bank was asked by the RBI to set aside Rs 1,283 crore as standard asset provision for working capital advances on the agricultural lending front which should not have been classified as priority sector loans (PSL).

The provisioning requirements for PSLs is different from other loans, he said, adding that the RBI's action is with respect of loans of Rs 20-25,000 crore done since 2012.

The central bank asked the bank to set aside the money following its annual supervisory exercise for FY25, Batra said, stressing that the bank is satisfied with the asset quality of loans and the provisions will get written-back as the loans get repaid.

Meanwhile, on Bakhshi's reappointment, Batra maintained that the decision has been arrived at after discussions between the MD and the board, and declined to reply any other questions.

The core net interest income jumped 7.7 per cent on-year to Rs 21,932 crore during the reporting quarter, on the back of an 11.5 per cent loan growth and a 0.05 per cent expansion in the net interest margin to 4.30 per cent.

Its non-interest income excluding treasury operations increased 12.4 per cent to Rs 7,525 crore during the reporting quarter.

It had to set aside Rs 145 crore following the implementation of the new labour codes, and the overall provisions doubled to 2,556 crore, courtesy the RBI-mandated provisions on agricultural loans. The bank continues to hold a contingency provision of Rs 13,100 crore.

From an asset quality perspective, fresh slippages declined to Rs 5,356 crore during the reporting quarter from Rs 5,304 crore, and Rs 4,277 crore of the new additions were in the retail and rural segments.

The gross non-performing assets ratio improved to 1.53 per cent as of December 31, 2025 from 1.58 per cent three months ago.

On the loan growth side, the domestic corporate portfolio rose 5.6 per cent, retail grew 7.2 per cent while the business banking portfolio led with a 22.8 per cent growth.

From a capital adequacy perspective, the overall capital buffer was at 17.34 per cent, including the profits for the first nine months and the core buffer stood at 16.46 per cent.

Among the subsidiaries, ICICI Prudential Life Insurance reported an increase in the profit after tax to Rs 390 crore from Rs 326 crore in year-ago period, ICICI Lombard General Insurance Company's net declined to Rs 659 crore from Rs 724 crore, while the recently listed asset management arm's profit grew to Rs 917 crore from Rs 632 crore in the year-ago period. PTI AA TRB TRB