Private banks post good Q2 profit growth, asset quality improves

India’s three leading private sector lenders — HDFC Bank, ICICI Bank and Axis Bank — reported higher profits for the July-September quarter, with improved asset quality providing a boost amid mixed trends in lending margins and treasury income. All the three banks reported an improvement in asset quality, with bad-loan ratios declining, signalling better control over credit risks despite continuing pressure on profitability metrics at some lenders.

HDFC Bank, the country’s largest private sector lender, on Saturday reported a 4.7% rise in standalone net profit at Rs 19,510 crore in the July-September quarter as against Rs 18,641 crore a year ago.

The bank’s total income increased to Rs 97,258 crore from Rs 91,040 crore a year earlier. Provisions and contingencies edged up to Rs 3,573.62 crore from Rs 3,500 crore in the year-ago quarter. The bank said profit after tax, excluding treasury performance, grew 12.6% year-on-year.

Asset quality improved, with the gross NPA ratio declining to 1.11% at the end of September from 1.24% a year earlier and 1.17% in the preceding quarter.

Provisions and contingencies, excluding tax, increased 2.1% to Rs 3,573.62 crore from Rs 3,500.53 crore a year earlier. The total credit cost ratio was 0.44%.

Treasury trading gains fell to Rs 780 crore from Rs 2,390 crore a year earlier, limiting overall earnings growth. The bank said profit after tax, excluding treasury trading gains, rose approximately 12.6% year on year.

It said other income declined 3.6% to Rs 13,831.02 crore. Fee and commission income, however, increased to Rs 9,690 crore from Rs 8,840 crore.

Story continues below this ad

ICICI Bank Q2 net profit rises 20.1%

ICICI Bank reported a 20.1% year-on-year increase in standalone net profit to Rs 14,843 crore for the second quarter ended September 2026, compared with Rs 12,359 crore a year ago, driven by strong growth in net interest income, fee income and advances.

Net interest income (NII) rose 17.7% to Rs 25,339 crore from Rs 21,529 crore a year ago. However, the bank’s net interest margin (NIM), a key indicator of lending profitability, moderated to 4.18% from 4.30% in the year-ago quarter and 4.36% in the preceding quarter.

The bank’s asset quality improved during the quarter. Gross NPAs declined to 1.20% of gross advances as of September 30, against 1.58% a year earlier and 1.38% in June 2026. Net NPAs fell to 0.30% from 0.39% a year ago and 0.35% in the previous quarter.

Deposits grew 27.1% year-on-year to Rs 20.49 lakh crore at the end of September, while total advances increased 30% to Rs 18.32 lakh crore. However, excluding FCNR(B) deposits, deposit growth was 17% and loan growth was 24.1%, respectively.

Story continues below this ad

Core operating profit rose 21.8% to Rs 20,805 crore. Provisions, excluding tax, declined to Rs 851 crore from Rs 914 crore a year earlier. The bank reported a treasury loss of Rs 230 crore during the quarter, compared with a gain of Rs 220 crore in the year-ago period, reflecting market movements.

Axis Bank profit jumps

Axis Bank reported a 37.6% year-on-year increase in net profit to Rs 7,003.3 crore for the second quarter of FY27. The lender’s net interest income (NII) rose 11.8% to Rs 15,371.4 crore, while asset quality improved during the quarter. The bank reported a net interest margin (NIM) of 3.36% for the July-September quarter