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ICICI Bank reported a slower quarter as regulatory costs hit profits. The lender showed steady business growth, but higher provisions reduced earnings. At the same time, the bank cleared doubts around leadership by extending the CEO’s term. These two updates shaped investor mood during the quarter.
ICICI Bank posted a net profit of Rs. 11,318 crore for the December quarter. This marked a 4% drop compared to last year. The result fell short of market expectations. Analysts had expected profits to grow. The decline came mainly due to extra provisions ordered by the Reserve Bank of India.
The RBI asked the bank to set aside more money for certain agricultural loans. This direction followed the central bank’s annual review for FY25. The regulator found that some loans did not fully meet priority sector lending rules. As a result, ICICI Bank made additional provisions of Rs. 1,283 crore.
Because of this step, total provisions for the quarter rose sharply to Rs. 2,556 crore. This amount stood more than double compared to the same quarter last year. Bank executives said the issue was regulatory in nature. Borrowers continued to repay on time. Loan quality remained stable. There was no downgrade in asset classification.
The impacted loan book stood between Rs. 20,000 crore and Rs. 25,000 crore. This formed a large part of the rural loan portfolio. The bank said it planned to align these loans with RBI rules during renewals. Management expressed confidence in the long term quality of the portfolio.
Despite profit pressure, core business numbers stayed healthy. Net interest income rose about 8% to Rs. 21,932 crore. Margins improved slightly to 4.30%. Domestic loans grew 11.5% year on year and reached Rs. 14.7 trillion. Deposits increased 9.2% to Rs. 16.6 trillion by the end of December.
Asset quality also showed improvement. Gross non-performing assets fell to 1.53% of total loans. This was lower than the previous quarter and last year. The data reflected better credit control and stable repayments across segments.
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Alongside earnings, ICICI Bank announced a key leadership update. The board approved a two-year extension for managing director and CEO Sandeep Bakhshi. His current term ends in October. The new term will run until October 2028, subject to regulatory and shareholder approvals.
Private banks usually offer three-year CEO terms. The shorter extension raised questions. Bank officials said the decision came after internal discussions. They added that the early announcement reduced uncertainty and gave clarity to markets. Bakhshi remains eligible under RBI rules, which allow bank chiefs to serve up to age 70.
Market reaction stayed cautious. ICICI Bank shares traded slightly lower after the results. Investors focused on near term pressure from RBI provisions. At the same time, leadership stability offered some comfort.
ICICI Bank Q3 results showed how regulation can affect profits even when business growth stays strong. The bank now faces the task of balancing compliance with steady expansion in the coming quarters.
