HDFC Bank, ICICI Bank, Axis Bank, Kotak Bank report higher Q2 profits despite margin pressure

The country's leading private sector lenders HDFC Bank, ICICI Bank, Axis Bank and Kotak Mahindra Bank reported healthy earnings growth in the second quarter of current financial year. All the four banks reported growth in net profit and net interest income at the same time they also announced an improvement in asset quality at the end of September quarter.

However, due to higher deposit mobilisation of funds via Foreign Currency Non-Resident (Bank) FCNR(B) scheme impacted net interest margins (NIM for all the private lenders as the cost of raising funds increased significantly, analysts noted.

HDFC Bank Q2 earnings

HDFC Bank, the country's largest private lender, reported a net profit of ₹9,510 crore in the second quarter of current financial year, marking an increase of 5% from ₹18,641 crore in the same period last year.

Its net interest income (NII) or the difference between interest earned on loans and expended on deposits rose 10% to ₹34,619 crore at the end of the second quarter as against ₹31,551 crore in the year-ago period.

The bank's net interest margin was 3.16% on total assets, and 3.32% based on interest earning assets, HDFC Bank said.

Its NIM dropped from 3.27% in the year ago period.

The banks' asset showed an improvement as its gross non-performing assets (NPA), as a percentage of total advances, came in at 1.11% at the end of September quarter compared with 1.24% in the same period last year.

Its NPAs came in at 0.37%.

ICICI Bank Q2

ICICI Bank, the country's second largest private lender, reported rise in its standalone net profit in the July to September quarter supported by healthy interest income growth in the period.

ICICI Bank’s net profit increased 20.1% to ₹14,843 crore in the second quarter of current fiscal, from ₹12,359 crore in the corresponding quarter of the previous fiscal year.

ICICI Bank’s net interest income (NII) improved by 17.7% YoY to ₹25,339 crore in Q2 FY27, compared to ₹21,529 crore in the second quarter of FY26.

Despite the increase in interest income, the lender’s NIM declined 12 basis points to 4.18%, from 4.30% in the same quarter of the previous financial year. The expenses increased 14% in the Q2 earnings report.

The institutional lender’s interest income advanced 17.6% to ₹49,110 crore in the September quarter, from ₹41,757 crore in the same quarter of the previous fiscal year, as per the exchange filings.

ICICI Bank’s asset quality, or gross NPAs, improved by 38 basis points to 1.20% in the September quarter of FY27, in comparison to 1.58% in the September quarter of the previous financial year.

Axis Bank Q2

Axis Bank's net profit in September quarter jumped 38% to ₹7,003 crore from ₹5,089 crore in Q2FY26. The large part of profitability growth was driven by a 52.2% drop in provisions during the quarter to ₹1,693 crore, as compared to ₹3,547 crore in the same period last year.

Axis Bank NII advanced 11.8% YoY to ₹15,371 crore as compared to ₹13,745 crore in the same period last year. On a sequential basis, the net interest income surged 4.9%, up from ₹14,646 crore.

The interest expense growth of 22% outpaced the interest income growth of 17%, leading to a nearly 11% rise in net interest income.

Its NIM came in at 3.36% as against 3.73% a year earlier.

Kotak Mahindra Bank Q2

Kotak Mahindra Bank's NII rose 16% annually to ₹8,459 crore from ₹7,311 crore in the year-ago period.

Its net profit advanced 29% to ₹4,212 crore at the end of Q2 compared with ₹3,253 crore in the year-ago period.

The bank’s NIM softened to 4.31% from 4.54%.

The Mumbai-based lender's asset quality improved during the quarter as its gross NPA came in at 1.04% compared with 1.39% a year earlier.