New Delhi, May 2026: India’s leading private sector banks reported a strong set of earnings for the fourth quarter of FY2025-26, driven by steady profit growth, improved asset quality, and a sharp decline in provisions for bad loans.
The country’s top lenders—HDFC Bank and ICICI Bank—posted net profit growth of 9% and 8%, respectively. Meanwhile, Kotak Mahindra Bank, the fourth-largest bank by market capitalisation, reported a stronger 13% rise in net profit for the March quarter.
Profit Momentum Remains Strong
Profit growth remained resilient across all three lenders:
- HDFC Bank reported a net profit of ₹19,221 crore for the March quarter, up 9% from ₹17,616 crore a year ago.
- For the full financial year FY26, profit rose 11% to ₹74,671 crore.
- ICICI Bank posted an 8% increase in quarterly net profit to ₹13,701 crore, compared to ₹12,629 crore in the same period last year.
- Kotak Mahindra Bank reported a net profit of ₹4,027 crore in Q4FY26, marking a 13% rise from ₹3,552 crore a year earlier.
Analysts attribute the profit growth largely to lower provisioning and stable core income.
Lower Provisions Support Earnings
A key driver behind improved profitability was a sharp reduction in provisions for bad loans.
- Kotak Mahindra Bank’s provisions fell 43% to ₹516 crore, compared to ₹909 crore in the year-ago quarter.
- ICICI Bank’s provisioning dropped sharply by 89% to ₹96 crore, reflecting lower stress expectations.
This decline in provisioning significantly boosted the bottom line across banks.
Net Interest Income Sees Steady Growth
All three banks reported an uptick in net interest income (NII), indicating stable core lending performance:
- HDFC Bank: NII rose 3.2% to ₹33,082 crore
- ICICI Bank: NII increased 1.99% to ₹43,275 crore
- Kotak Mahindra Bank: NII grew 8% to ₹7,875 crore
Margins remained stable, though some moderation was seen:
- HDFC Bank’s NIM stood at 3.38% (total assets basis)
- Kotak Mahindra Bank’s NIM eased to 4.67%, compared to 4.97% a year ago
Asset Quality Improves Further
Another highlight of the quarter was the continued improvement in asset quality across lenders:
- HDFC Bank: Gross NPAs declined to 1.15% from 1.33%
- ICICI Bank: NPAs fell to 1.40%, down 27 basis points from 1.67%
- Kotak Mahindra Bank: NPAs improved to 1.20% from 1.42%
In absolute terms:
- HDFC Bank’s gross NPAs stood at ₹34,061 crore
- ICICI Bank saw a notable reduction in bad loan expectations
- Kotak Mahindra Bank’s NPAs declined to ₹6,018 crore
What It Means for the Banking Sector
The Q4FY26 results highlight a broad-based strengthening of India’s private banking sector, with:
- Strong and consistent profit growth
- Lower credit costs due to reduced provisions
- Stable core income from lending
- Improved asset quality
Conclusion
India’s top private lenders have ended FY26 on a solid note, reflecting resilience in their balance sheets and operational performance. With improving asset quality and declining stress on loan books, the sector appears well-positioned to sustain growth momentum in the coming quarters.
