ICICI Bank's net interest margins stood at 4.3 percent in the April-June quarter (Q1FY26), in-line with the corresponding quarter last year. Going ahead, the management expects that margins would to be rangebound as recent rate cuts are yet to play out.
"The full impact of the recent rate cuts is yet to play out completely — the February and April cuts have largely flowed through the loan book already, while the June cut is expected to reflect more in Q2," the management said in its post-results analyst call.
The management clarified that the sharp Q3–Q4 margin spike seen last year was an exception, driven partly by methodology differences and seasonal factors, and is unlikely to recur this year.
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"For Q1 FY25, margins declined as expected, primarily due to the higher number of days in the quarter, and not because of any structural unwinding," they added.
On the funding side, the reduction in savings deposit rates and runoff of high-cost wholesale deposits have contributed to a lower cost of funds, supporting margins. The bank also highlighted that competition for deposits and loans remains manageable for now, and it will continue to focus on growing its low-cost CASA base by deepening customer relationships.
The private lender reported a 15 percent year-on-year increase in net profit to Rs 12,768.21 crore for the fiscal first quarter. Net interest income (NII) — the difference between interest earned and expended — rose 8.4 percent YoY to Rs 21,634.46 crore.
Asset quality improved on a yearly basis, with the gross NPA ratio declining to 1.67 percent from 2.15 percent and the net NPA ratio falling to 0.41 percent from 0.43 percent. Sequentially, however, both ratios remained stable.
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