Bank Stock Fall 4% After Q3 Net Profit Declines on RBI-Mandated Agri Loan Provision

SYNOPSIS: ICICI Bank’s Q3 FY26 profit dipped on RBI-mandated agri loan provisioning, while NII, credit growth, margins, and asset quality remained resilient, keeping brokerages positive on the stock.

During Monday’s trading session, shares of the second-largest private sector bank in India, offering a diversified portfolio of financial products and services, tumbled nearly 4 percent on BSE, after reporting a fall in net profits in Q3 FY26 on RBI-mandated agri loan provision.

At 01:42 p.m., shares of ICICI Bank Limited were trading in red at Rs. 1,371.7 on BSE, down by around 3 percent, compared to its previous closing price of Rs. 1,411.65, with a market cap of Rs. 9.81 lakh crores. The stock has delivered positive returns of around 11 percent in one year, and has gained by over 1 percent in the last one month.

News

ICICI Bank Limited announced the financial results for the third quarter of FY26 on Saturday, as per the latest regulatory filings with the stock exchanges. For Q3 FY26, the bank reported a net interest income (NII) of Rs. 26,489 crores, reflecting a sequential growth of around 1.2 percent QoQ compared to Rs. 26,163 crores in Q2 FY26, and a year-on-year marginal increase of about 9 percent from Rs. 24,403 crores recorded in Q3 FY25.

During the same period, net profit stood at Rs. 13,411 crores, indicating a decline of around 6.3 percent QoQ from Rs. 14,318 crores in Q2 FY26, and a marginal fall on a year-on-year basis by more than 3 percent from Rs. 13,846 crores reported in Q3 FY25. The moderation in profitability was largely driven by a regulatory provisioning requirement during the quarter.

Following its annual supervisory review, the Reserve Bank of India (RBI) directed the bank to create a standard asset provision of Rs. 1,283 crore ($143 million) in respect of a portfolio of agricultural priority sector credit facilities worth Rs. 20,000-25,000 crore, citing non-compliance with priority sector norms.

Further, the bank reported a treasury loss of Rs. 157 crore ($17 million) in Q3 FY26 as compared to a gain of Rs. 371 crore ($41 million) in Q3 FY25, primarily reflecting market movements.

As of December 2025, CASA deposits rose to Rs. 6,67,590 crore, reflecting a robust increase of around 1.3 percent QoQ and 8.4 percent YoY, while the Average CASA ratio stood at 39 percent, down from 39.2 in Q2 FY26 but stable at 39 percent in Q3 FY25, with growth in Savings Bank by 5.8 percent and Current Account by 14.5 percent. Net interest margin remained stable at 4.3 percent, unchanged sequentially and marginally higher than the year-ago level from 4.25 percent in Q3 FY25.

Brokerages have maintained their positive stance on the stock, noting that, excluding the one-time provisioning impact, core pre-provision operating profit grew 6-7 percent YoY. Credit growth strengthened to 11.5 percent annually, while asset quality remained robust with gross NPAs at 1.53 percent. However, analysts flagged potential pressure on credit costs in the near term as the bank normalises the flagged agricultural portfolio. The stock currently trades at a price-to-book multiple of 3.0x FY26 estimated book value.

ICICI Bank Limited is a publicly held banking company engaged in the business of providing a wide range of banking and financial services, including commercial banking and treasury operations. It also has overseas branches in Bahrain, China, Dubai, Hong Kong, Singapore, the USA and offshore banking units.

As of 31st December 2025, the bank operates a total of 7,385 branches across India. Of these, 2,308 branches were located in metro regions (31.3 percent), 1,501 in urban areas (20.3 percent), 1,939 in semi-urban centres (26.3 percent), and 1,637 in rural locations (22.1 percent). In addition, the bank’s delivery network included 11,983 ATMs and cash recycling machines (CRMs) as of the same date.

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