ICICI Bank’s fiscal third-quarter net profit was hit by an RBI-directed additional provision it had to make following a supervisory review, falling 4% to Rs 11,318 crore versus Rs 11,792 crore a year ago.

The country’s second-largest private sector bank disclosed that the Reserve Bank of India (RBI) mandated the lender to make provisions of Rs 1,283 crore on its agriculture priority sector loan book. 

The regulator found some assets classified as agriculture priority sector lending (PSL) did not meet regulatory requirements. 

Loans worth Rs 20,000-25,000 crore were found to be inaccurately classified. “The underlying portfolio that we need to work out and resolve in terms of ensuring conformity with the priority sector lending (PSL) guidelines would be between Rs 20,000-25,000 crore,” said ICICI Bank group chief financial officer Anindya Banerjee.

The additional standard asset provision will continue until the loans are repaid or renewed in conformity with the PSL classification guidelines.

Banerjee said the bank will work to bring it in conformity with regulatory expectations. There will be no change in asset classification or in the terms and conditions applicable to the borrowers or in the repayment behaviour of borrowers as per these terms, he told analysts in a post-earnings call. 

The bank’s overall provisions in the December quarter more than doubled over the year-ago period to 2,556 crore.

NII and NIM in Q3

For the three months to end-December, ICICI Bank’s net interest income rose 7.7% year-on-year to Rs 21,932 crore, on the back of an 11.5% domestic loan growth. 

Net interest margin remained unchanged on quarter at 4.30% but expanded year-on-year by 0.05%.

Non-interest income, excluding treasury operations, rose 12.4% to Rs 7,525 crore in the December quarter.

Asset quality

ICICI Bank’s asset quality improved marginally, with its gross non-performing asset (NPA) ratio at 1.53% as on 31 December, compared with 1.96% a year ago and 1.58% a quarter ago.

Net NPA narrowed to 0.37% as against 0.39% in the preceding quarter and 0.42% in the earlier year.

During the quarter, net additions to gross NPAs, excluding write-offs and sales, stood at Rs 2,074 crore.

The provisioning coverage rate on non-performing loans was 75.4% as on 31 December 2025 compared to 75% a quarter ago and 78.2% a year ago.

Deposit growth

Total deposits grew 9.2% to Rs 16.60 lakh crore as on 31 December 2025.

Low-cost CASA (current account savings account) deposits grew 8.4% year-on-year to Rs 6.68 lakh crore. Term deposits grew 9.6% to Rs 9.92 lakh crore.

CASA ratio was 40.2% of total deposits, lower than 40.85% in the previous September quarter. 

Loan book

The bank’s total loan book grew 11.5% year-on-year to Rs 14.66 lakh crore as on 31 December 2025.

Retail loans stood at Rs 7.54 lakh crore, up 7.2% year-on-year and 1.9% sequentially. This was led by mortgage loans which stood at Rs 4.75 lakh crore, up 11.1% YoY and 3.2% quarter-on-quarter. Personal loans at Rs 1.24 lakh crore was up 2.4% YoY and 1.7% QoQ. 

The domestic corporate segment grew 5.6% YoY to Rs 2.96 lakh crore as on 31 December.

Labour Code 

The bank set aside Rs 145 crore following the implementation of the new labour codes.