IDBI Bank Q2 results: Net profit declines 39% YoY to ₹2,205 crore, gross NPAs drop 53 basis points; key things to know

IDBI Bank announced its July to September quarter results for the financial year 2026-27 on Saturday, October 17, in which the institutional lender posted a 39% fall in its standalone net profits due to a higher base issue from a one-off impact last year, despite healthy interest income growth in the period.

NSE filings showed that IDBI Bank’s standalone net profit after tax (PAT) declined 39.1% year-on-year (YoY) to ₹2,205.45 crore in the second quarter of FY27, in comparison to ₹3,627.36 crore in the corresponding quarter of the previous financial year.

Although the profits declined on a yearly basis, IDBI Bank’s net profits rose 4% quarter-on-quarter (QoQ) to its September quarter levels, in comparison to ₹2,115.18 crore in the first quarter of FY27.

The bank’s interest income for the period under review advanced nearly 20% to ₹8,512 crore in the September quarter, in comparison to ₹7,104 crore in the same quarter of the previous financial year, as per the standalone statements.

Shares of IDBI Bank are set to be in focus of investors on Monday, October 19, as the company announced its Q2 earnings report on a weekend, Saturday, October 17.

Why did IDBI’s profit fall despite NII increase?

IDBI Bank attributed its YoY decline in net profits to a higher base last year, as the company’s results included a one-off gain of ₹1,699 crore arising from the sale of the company's stake in NSDL via an offer-for-sale transaction.

In Q2 FY26, the bank sold an 11.11% shareholding in National Securities Depository Ltd (NSDL) through an offer-for-sale, which resulted in a one-time gain reflected in the company’s overall profits in the period. The bank said that excluding this impact, the net profits improved 14% in the Q2 FY27 earnings report.

“Excluding this one-off gain, YoY increase in Operating Profit and Net Profit is 59% and 14% for Q2 FY27, respectively,” according to the company’s official statement.

Apart from the one-time impact, the lender’s overall expenses in the period under review also surged around 15% year-on-year to ₹6,973 crore, from ₹6,071 crore in the same period a year earlier.

In contrast, IDBI Bank’s Net Interest Income (NII) stood at ₹4,228 crore, marking a YoY growth of 29% and sequential growth of 21% in the period under review.

The data further showed that the institutional lender’s Net Interest Margin (NIM) marked a 40 basis point increase YoY, and a 50 basis point rise QoQ to 4.11% as of the September quarter of FY27.

Asset quality improves

Looking at asset quality, IDBI Bank’s financial statements showed that the institutional lender’s gross non-performing assets (NPAs) contracted by 53 basis points (bps) to 2.12% in the Q2 FY27 results, from 2.65% levels in the same period a year earlier.

The lender’s provision for bad loans or NPAs was a negative ₹853.62 crore in the period under review, in comparison to a negative ₹578.80 crore in the same period of the previous financial year.

Banks usually classify a loan as an NPA after 90 days of non-payment, as the borrower fails to pay both the interest and principal to the lender.

Latest update

The Union Cabinet approved the strategic restructuring of a 60.72% stake in the institutional lender to Canada-based Fairfax Financial, according to an official filing. As part of the deal, the Government of India will sell a 30.48% stake, and the Life Insurance Corporation of India (LIC) will sell 30.24% to Fairfax Financial.

Market experts predict that this strategic stake sale move will keep attrition levels high in the banking industry while keeping Fairfax's competitive position dynamic in the market. The Government of India and LIC will receive the proceeds of the transaction, to the tune of ₹52,878 crore, divided in the same proportion as the stakeholding sale.

Fairfax will pay ₹81 per share for IDBI Bank, higher than the benchmark fair value of ₹75.99 determined by two independent valuation agencies.

The government expects IDBI Bank’s strategic restructuring deal is set to have a significant positive effect on the banking and financial sector of the Indian economy, as the lender will be able to generate funds without any dependence on government assistance post-privatisation.

IDBI Bank share price

Shares of IDBI Bank have risen 34.5% in the last five years, and around 20% returns in the last three-year period, according to NSE data. However, the stock has lost 8.9% in the last one-year period.

On a year-to-date (YTD) basis, the stock has lost 19% in 2026, but has gained 1.3% in the last one-month period. The exchange data showed that the IDBI Bank shares have risen 1.1% in the last one-week period.

The company’s market capitalisation (m-cap) was at ₹90,449 crore as of the trading session on Friday, October 16, 2026.