Top Private Lenders Report Strong Q2 Profit Growth With Better Asset Quality

India's three main private sector lenders posted higher profits for the July-September quarter, backed by better asset quality despite mixed trends in lending margins and treasury income. All three banks saw bad-loan ratios drop, showing better control over credit risks.

HDFC Bank

HDFC Bank reported a 4.7% rise in standalone net profit at Rs 19,510 crore for the quarter against Rs 18,641 crore a year ago. Total income grew to Rs 97,258 crore from Rs 91,040 crore. The bank's gross NPA ratio dropped to 1.11% at the end of September from 1.24% a year earlier. Treasury trading gains fell to Rs 780 crore from Rs 2,390 crore, while profit after tax excluding treasury gains rose about 12.6% year-on-year.

ICICI Bank

ICICI Bank posted a 20.1% year-on-year jump in standalone net profit at Rs 14,843 crore compared to Rs 12,359 crore a year ago. Net interest income rose 17.7% to Rs 25,339 crore, though its net interest margin moderated to 4.18%. Gross NPAs fell to 1.20% from 1.58% a year ago. Deposits grew 27.1% to Rs 20.49 lakh crore, and total advances went up 30% to Rs 18.32 lakh crore. The bank reported a treasury loss of Rs 230 crore.

Axis Bank

Axis Bank posted a 37.6% year-on-year increase in net profit at Rs 7,003.3 crore for the second quarter of FY27. Its net interest income grew 11.8% to Rs 15,371.4 crore, and asset quality improved with a net interest margin of 3.36%.

Context

Private banks in India closely monitor metrics like net interest margins and bad-loan ratios to gauge their overall financial health. Improvements in asset quality generally mean fewer loans are turning into bad debts, which helps stabilize operations even when treasury income fluctuates due to market conditions.