ICICI Bank, which posted an 18% year-on-year rise in fiscal fourth quarter net profit to Rs 12,629 crore, could continue to maintain asset quality stability in FY26 while seeing some impact on its net interest margins (NIM) as the Reserve Bank of India has moved to an interest rate-cutting cycle.

The country’s second-largest private bank said it will maintain a cautious approach on its unsecured loan portfolio and continue to monitor it closely.

“Our corporate portfolio continues to perform well. On the retail side, secured products are doing quite well, and on the unsecured side, NPL formation has largely stabilised. We plan to adopt a wait-and-watch approach over the next couple of quarters. The credit cost we are currently reporting already factors in much of this, with the credit cost remaining below 30 basis points. Overall, things are looking quite stable as we step into the new financial year. That said, we will remain vigilant and monitor global trends, domestic developments, and trade-related risks—but as of now, the situation appears steady,” the management said in the post-earnings conference call.

The performance of unsecured loans originated around 18 months ago, according to the management, has shown signs of stabilisation and has provided a reasonable degree of comfort. 

On NIM, ICICI Bank will make efforts to maintain stability. “Loan repricing happens quickly, but deposits take longer to adjust. With growing expectations of a rate cut and deposit rates already starting to fall, we will need to think carefully about our long-term strategy. There could be some impact on margins, as several factors will influence the outcome. Overall, we will stay focused on risk-adjusted pre-provision operating profit (PPOP) and continue with the growth margins we have already achieved,” the management said.

In April, the RBI reduced the repo rate for the second consecutive time by 25 basis points to bring it down to 6%. More interest rate cuts are expected to be on the way.

Financial Results

ICICI Bank posted a 17.95% rise in fiscal fourth quarter net profit to Rs 12,629.58 crore compared to Rs 10,707.53 crore a year ago.

The private lender saw its total income grow 14% year-on-year to Rs 49,690.87 crore in the quarter ended March 2025. 

Profit before tax rose 17.13% YoY to Rs 16,773.55 crore in the fourth quarter of FY25.

Interest income grew 11.8% to Rs 42,430.80 crore compared to Rs 37,948.36 crore in the same period of the previous year.

NII, NIM

Net interest income (NII) grew 10.99% YoY to Rs 21,193 crore. 

Net interest margin (NIM) improved marginally to 4.41%, from 4.40% in Q4 FY24.

Provisions

Provisions (excluding provision for tax) grew 23.96% to Rs 890.70 crore from Rs 718.49 crore  in the same period a year ago. 

The provisioning coverage ratio (PCR) on non-performing loans was 76.2% at 31 March 2025.

Deposits

Deposits grew 13.98% YoY to Rs 16,10,348 crore as of March 2025. Average CASA (current account savings account) deposits grew 10% YoY. 

ICICI Bank’s management said in an analyst call that challenges for CASA are behind it, given improvement in system liquidity, rate cut cycle, and capital markets.

Loans 

Total advances jumped 13.28% YoY to Rs 13,41,766 crore as of 31 March 2025. The retail loan portfolio grew by 8.85% YoY and comprised 52.4% of the total loan portfolio. Including non-fund outstanding, the retail portfolio was 43.8% of the total portfolio.

Amid US President Donald Trump’s sweeping tariff proposals, paused for 90 days, ICICI Bank’s executive director Sandeep Batra said the lender will remain cautious on the overseas loan book, which stood at Rs 30,785 crore in the March quarter, down nearly 8% from Rs 33,451 crore a year ago.

The overseas book accounted for 2.3% of the bank’s total advances as of 31 March 2025, down from 2.40% a quarter ago and 2.82% a year ago.

Asset quality

The lender's asset quality improved, with gross non-performing asset (NPA) ratio declining to 1.67% as of 31 March 2025, compared to 1.96% in the preceding quarter and 2.16% in the year-ago quarter.

Net NPAs dropped to 0.39% in the January-March quarter of 2025, from 0.42% in the previous  quarter and 0.44% in the year-ago quarter.

The provisioning coverage ratio on non-performing loans was 76.2% as of 31 March 2025.

Dividend

ICICI Bank’s board recommended a dividend of Rs 11 per equity share of face value of 2 each, subject to requisite approvals. 

The dividend on equity shares will be paid after it is approved by the members at the ensuing annual general meeting (AGM) of the bank.

Capital adequacy 

The bank's total capital adequacy ratio at 31 March 2025 was 16.55%, and the CET-1 ratio was 15.94%.