India Banks Q3 Earnings: HDFC, ICICI, Yes Bank, RBL in Focus

Major Indian banks delivered mixed financial results for the third quarter of FY26, reflecting divergent performance across loan growth, net interest margins and profitability. HDFC Bank exceeded expectations with a solid earnings beat, ICICI Bank reported a slight profit decline, Yes Bank posted robust net profit growth, while RBL Bank’s earnings fell short of forecasts.

HDFC Bank reported a net profit of ₹18,653 crore for the December quarter, an 11.5 per cent increase year-on-year, driven by improved lending margins and sustained loan growth. Net interest income rose about 6.4 per cent as loan disbursements expanded strongly across corporate and SME segments, aided by a cumulative 125 basis points of rate cuts by the Reserve Bank of India aimed at stimulating credit demand. Deposit growth remained healthy, rising more than 11 per cent, underpinning the bank’s stable funding profile. Asset quality remained resilient, with a gross non-performing asset ratio of around 1.24 per cent, unchanged from the previous quarter. Analysts noted that these results underscore HDFC Bank’s leadership in credit growth and margin expansion within the private banking sector.

In contrast, ICICI Bank’s standalone net profit slipped about 4 per cent year-on-year to ₹11,318 crore, falling short of broker projections. The second-largest private sector lender cited pressure on fee income and competitive deposit costs as key factors moderating profitability. While net interest income trends were supported by broad loan growth, the slowdown in other income and rising operating expenses weighed on bottom-line performance. The subdued outcome may prompt a reassessment of cost management initiatives as the bank navigates a challenging macroeconomic environment.

Yes Bank stood out with a strong profitability rebound, reporting a roughly 55 per cent year-on-year surge in net profit to about ₹9.52 billion. The profit boost was largely attributed to a significant reduction in provisions for bad loans, which fell sharply as the bank strengthened its balance sheet buffers. Net interest income also climbed, reflecting modest loan growth and lower deposit costs following rate cuts. Asset quality metrics improved slightly, with a reduction in gross non-performing assets compared to the previous quarter. The results signal Yes Bank’s ongoing recovery and strategic progress following capital support and operational recalibration.

RBL Bank’s third-quarter results illustrated a weaker picture relative to market forecasts, with net profit around ₹214 crore. Although this represented a substantial increase from the prior year’s level, it fell short of analysts’ estimates. The bank’s net interest income rose modestly, supported by strong growth in retail and small business loans, while its deposit base expanded by double-digit rates. RBL Bank’s shift away from riskier unsecured lending toward mortgages and auto loans contributed to improved asset quality, with a reduction in gross non-performing assets. Management highlighted the integration of Emirates NBD’s strategic support as a catalyst for portfolio rebalancing.

The mixed earnings from these banking majors reflect broader sector dynamics in India’s financial system. While stronger credit demand and interest margins have boosted topline performance for some lenders, competitive pressures on deposit costs, fee income volatility and cost of funds continue to temper profitability. Investors and analysts are expected to closely monitor asset quality trends, capital adequacy ratios, and strategic priorities such as digital banking expansion and cost rationalisation as banks navigate the remainder of FY26.

Additional banks including UCO Bank, IDBI Bank and other financial firms also reported results on January 17, reinforcing the market’s focus on credit growth and capital efficiency metrics across the sector. These quarterly outcomes will influence expectations for near-term interest margins and the broader health of the Indian banking industry as it adjusts to evolving macroeconomic conditions and regulatory developments.