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# ICICI Bank Limited (NYSE: IBN): Business, Risks and Results Through the Quarter Ended September 30, 2026 ICICI Bank reports in Indian rupees. All money amounts in this document are converted into US dollars. Flows for a period (income, expenses, profit) use the average exchange rate for that period, and balances use the rate on the balance-sheet date. Where a growth rate is given, it is the change in US-dollar terms, with the change in rupees in parentheses. The rupee weakened over the periods covered. It averaged 95.61 per dollar in the July–September 2026 quarter against 87.34 a year earlier, so the US-dollar growth rates trail the rupee ones. Percentages the bank gives without an underlying amount are rupee-based, as reported. The bank's fiscal year ends March 31: "fiscal 2026" is the year ended March 31, 2026, and the quarter ended September 30, 2026 is the second quarter of fiscal 2027. Each American Depositary Share represents two equity shares. The financial statements discussed here are prepared under Indian GAAP. ## Business *Source: Annual Report on Form 20-F for fiscal 2026, accession 0000950103-26-010820.* ICICI Bank is a large Indian private-sector bank and the parent of a diversified financial services group. Its main business is commercial banking for retail and corporate customers in India. It takes deposits and lends to individuals, small businesses, mid-market companies and large corporations, and it earns fees on cards, transaction banking, trade, foreign exchange, derivatives and third-party product distribution. Net interest income was $12.02 billion in fiscal 2026, close to half of the group's $25.25 billion of net total income. Most of the rest came from the insurance subsidiaries' premiums and from fees. The bank also runs life and general insurance, asset management, securities brokerage, primary dealership and pension fund businesses through subsidiaries. At March 31, 2026, consolidated total assets were $310.61 billion, and the bank had 7,511 branches and 12,087 ATMs and cash-recycling machines in India. The bank reports in the business segments the Reserve Bank of India prescribes: - **Retail Banking.** Loans to individuals and small businesses that meet the regulator's retail criteria (orientation, product type, granularity and a cap on individual exposure), plus card and distribution income. The retail lending portfolio was $90.88 billion at March 31, 2026. Home loans made up 63.7% of it, personal loans 15.2%, automobile loans 7.4%, credit cards 6.4% and commercial business loans 4.4%. Secured loans were 78.1% of the retail book. Home loans are mostly floating-rate and linked to the Reserve Bank of India's repo rate. - **Wholesale Banking.** Lending to companies, trusts, partnerships and statutory bodies that fall outside retail. This includes corporate finance, working capital, project finance and transaction banking. - **Treasury.** The bank's investment and derivatives portfolio, which includes regulatory reserve holdings, proprietary trading in fixed income and equities, and foreign exchange and derivative products for clients. - **Other Banking.** Leasing and unallocated banking items, plus the banking subsidiaries ICICI Bank UK PLC and ICICI Bank Canada. - **Life Insurance.** ICICI Life Insurance Limited (formerly ICICI Prudential Life Insurance Company Limited). The bank owned 50.9% at March 31, 2026, and Prudential Corporation Holdings (PCHL) owned 21.9%. - **General Insurance.** ICICI Lombard General Insurance Company Limited, 51.3% owned at March 31, 2026. It was India's second-largest general insurer in fiscal 2026, with an 8.5% share of gross direct premium. - **Others.** ICICI Prudential Asset Management Company (listed through an offer for sale by PCHL, with the bank holding the majority), ICICI Securities (wholly owned and delisted since March 24, 2025), ICICI Home Finance, ICICI Securities Primary Dealership, ICICI Pension Fund Management and smaller entities. With effect from April 1, 2026, ICICI Venture's private equity, venture capital and real estate fund management business moved into the asset management company. Abroad, the bank runs subsidiaries in the UK (with a branch in Germany) and Canada. It has branches in New York, the Dubai International Financial Centre, Bahrain, Hong Kong, Singapore and China, plus an IFSC banking unit in Gandhinagar, and representative offices in the UAE, the US, Nepal, Bangladesh, Sri Lanka, Malaysia and Indonesia. The international franchise focuses on non-resident Indians (deposits, wealth, remittances), on well-rated Indian corporates and multinationals for India-linked trade and lending, and on global capability centers. At year-end fiscal 2026, overseas branches held 2.7% of the bank's loan portfolio. In May 2026 the Reserve Bank of India gave a no-objection to closing the offshore banking unit in the Santacruz export zone, Mumbai. Management's stated strategy is to grow "profit before tax excluding treasury" within the bank's risk and compliance limits. Its guiding principles are "Return of Capital", "Fair to Customer, Fair to Bank", "One Bank, One Team", agile risk management and "Compliance with Conscience". Execution centers on serving customer ecosystems and micro-markets, a "Bank to Bank Tech" technology programme (including measured use of AI), and decongesting processes. The bank says it has no specific targets for loan mix or for loan growth by segment. It aims to keep growing its deposit franchise and protect its cost-of-funds advantage. The group traces its roots to ICICI, a development finance institution formed in 1955 by the World Bank, the Government of India and Indian industry. ICICI Bank was incorporated in 1994, and ICICI merged into the bank in 2002. ## Risk factors *Source: Form 20-F for fiscal 2026, accession 0000950103-26-010820, "Risk Factors" and "Legal and Regulatory Proceedings".* The 20-F's risk discussion centers on the Indian economy, an intensifying regulatory regime, loan quality and the bank's insurance holdings. The substantive risks are: - **Indian macro, oil and geopolitics.** The bank's loan book depends on Indian growth. India imports most of its oil, and the conflict in West Asia since March 2026 raised crude prices and disrupted supply chains, with possible knock-on effects for borrowers. In May 2026 the government launched a new emergency credit-line guarantee scheme. The bank warns that loans made under such schemes may carry more risk than the rest of its portfolio. US tariffs and global trade policy are named as downside risks to exports and growth. - **Regulatory and supervisory action.** The Reserve Bank of India's annual supervisory review can impose provisions beyond the bank's own assessment. In fiscal 2026 it directed a $145.21 million standard-asset provision against agricultural priority-sector facilities whose terms did not fully meet the rules for that classification. The bank is still reviewing those loans and holds the provision until the review is complete. The RBI fined the bank twice in fiscal 2026 for compliance lapses (cybersecurity, KYC, card issuance, valuer empanelment, current-account opening). A SEBI show-cause proceeding against the bank over alleged listing-regulation non-compliance is still pending. It was first issued in fiscal 2018 to the bank and its former Managing Director & CEO, and the bank's case has since been separated from the former CEO's. Government and regulatory inquiries into the former CEO are ongoing. - **Accounting and capital rule changes.** In April 2026 the RBI issued an expected-credit-loss provisioning framework with prudential floors. It takes effect April 1, 2027 and "will likely increase provisioning requirements for banks". A revised standardized approach for credit-risk capital also starts April 1, 2027. Against this the bank holds a contingency provision, which was $1.40 billion at March 31, 2026. - **Directed (priority-sector) lending.** 40% of adjusted net bank credit must go to priority sectors, with sub-targets. In fiscal 2026 the bank reached 17.8% of adjusted net bank credit in agriculture against an 18.0% requirement, and 13.7% for non-corporate farmers against 14.0%. Shortfalls must be placed in low-yielding government schemes ($1.11 billion held at March 31, 2026) or covered by buying priority-sector certificates. The gross NPA ratio in the priority-sector book was 1.6% in fiscal 2026. - **Capital and liquidity requirements.** As a domestic systemically important bank, ICICI carries a 0.2% CET1 surcharge and a 4.0% minimum leverage ratio. Consolidated CET1 was 16.25% and leverage 10.8% at March 31, 2026. From April 1, 2026, a new rule requires an extra 2.5% liquidity run-off assumption on internet- and mobile-enabled retail and small-business deposits. - **Asset quality and concentration.** Retail and small-business lending is the growth engine, so a downturn in employment or consumption would hit it first. The bank specifically flags AI-driven job losses as a risk to retail asset quality. It also has exposure to project finance, real estate and commodity-sector borrowers, concentration in certain borrower groups and sectors, and collateral that can be slow to enforce in Indian courts. - **Interest-rate and funding risk.** Margins depend on how fast asset yields and deposit costs reprice. Funding is mostly short-term deposits that can be withdrawn early. The bank also cites competition for low-cost deposits and a possible central-bank digital currency as threats to cheap funding. - **Tax and litigation.** Disputed tax demands (income tax, service tax, GST and others) left a contingent tax liability of $1.58 billion at year-end fiscal 2026, for which the bank has not provided. There were 161 litigations against the bank each claiming at least $106,576, with aggregate claims of $8.31 billion where quantifiable. - **Insurance subsidiaries.** The bank may have to inject capital, and its stakes can be diluted or capped by regulation. In some circumstances the law can require it to bring holdings down to 30% unless it gets approval. In May 2026 India raised the automatic-route foreign-investment ceiling for insurers from 74% to 100%, which the bank says may drive consolidation and competition. Actuarial, reserving and catastrophe risks apply to the life and general insurers. - **Technology and cyber.** The bank cites rising digital competition from fintechs and new licensees, cyberattacks, insider misuse and system downtime, plus growing data-privacy and AI regulation. - **ADS holders.** ADS holders bear rupee exchange-rate risk, face restrictions on voting and on withdrawing or redepositing shares, and may owe Indian capital-gains tax. ## Management's discussion of fiscal 2026 *Source: Form 20-F for fiscal 2026, accession 0000950103-26-010820, "Operating and Financial Review and Prospects".* Fiscal 2026 was a year of steady rupee growth that looked much flatter in US dollars. Consolidated net profit after minority interest was $6.14 billion, up 1.6% (6.2% in rupees). The measure management steers by, profit before tax excluding treasury, rose 2.0% to $7.70 billion (6.6%). Operating profit before provisions rose 1.8% to $9.36 billion (6.4%). Higher net interest income and other income drove the increase, partly offset by higher operating expenses. - **Margin.** Net interest income grew 4.4% to $12.02 billion (9.1%) on a 9.2% rise in average interest-earning assets. The overall net interest margin held at 4.41%. Asset yields fell 34 basis points to 8.11%, and the cost of funds fell 36 basis points to 4.79%. The bank attributes the lower yield on rupee loans mainly to the RBI's repo-rate cuts (125 basis points since February 2025, to 5.25%) and to new lending at lower yields. 56% of the bank's domestic loans are linked to the repo rate or other external benchmarks. The rupee portfolio's margin edged up to 4.59%, while the foreign-currency portfolio's fell to 2.15%. - **Other income.** Insurance premium and related operating income rose 4.7% to $8.79 billion (9.5%). Commission, exchange and brokerage income rose 1.0% to $3.32 billion (5.6%). - **Costs.** Operating expenses rose 5.1% to $15.89 billion (9.9%). The main drivers were employee costs and insurance-business expenses. - **Credit costs.** Provisions rose 9.9% to $638.35 million (14.9%), including the $145.21 million RBI-directed agricultural provision. Excluding that provision and a fiscal 2025 transfer relating to loans sold to an asset reconstruction company, provisions for non-performing assets fell because fewer retail and rural loans turned bad. Gross non-performing loans declined in rupees, and the net NPL ratio was 0.4% in both years. The provision coverage ratio was 74.0%, down from 74.7%. - **Segments.** Wholesale banking profit before tax rose 8.7% to $2.77 billion (13.6%). Higher net interest and other income drove it, partly offset by higher operating expenses and smaller provision write-backs, and wholesale advances grew 24.2% in rupees. Retail banking profit before tax rose 2.8% to $2.63 billion (7.5%). There, higher net interest and fee income was partly offset by employee, technology, direct-marketing and reward-point costs and by higher provisions on net NPA additions. Treasury profit before tax fell 12.0% to $1.95 billion (down 8.0%). - **Balance sheet and capital.** Total assets were $310.61 billion at March 31, 2026, up 0.4% (10.3%). Advances rose 5.4% to $175.28 billion (15.8%) and deposits rose 1.5% to $195.04 billion (11.5%). The bank's current and savings account deposits grew 10.4% in rupees, and deposits made up 93.5% of the bank's funding. Net worth was $38.69 billion. On a standalone basis, CET1 rose to 16.4% and total capital to 17.2%. Consolidated ratios were 16.3% and 17.1%. - **Dividend.** On April 18, 2026 the board recommended a dividend of $0.13 per equity share ($0.26 per ADS) for fiscal 2026. That is up 0.2% in US dollars from fiscal 2025's dividend (up 9.1% in rupees). Dividends paid in the first half of fiscal 2027 totalled $905.24 million. Management's outlook is positive on India over the medium term, citing demographics, digitization, formalization and healthy corporate and bank balance sheets. It names global trade policy, energy prices and geopolitical tension as risks, and notes that AI may intensify competition and affect employment. The bank plans to keep growing profit before tax excluding treasury and its deposit franchise while maintaining capital well above regulatory minimums. ## Current quarter: second quarter of fiscal 2027 (ended September 30, 2026) *Source: Report on Form 6-K furnished October 22, 2026, accession 0000950103-26-015987 (board-approved results of October 17, 2026, limited-reviewed by joint auditors B S R & Co. LLP and C N K & Associates LLP, with the accompanying news release). Funding-scheme figures are from the Form 6-K of September 2, 2026, accession 0000950103-26-013427. Figures are standalone unless marked consolidated.* **A balance sheet swollen by the FCNR(B) swap window.** The quarter's defining feature was the Reserve Bank of India's swap facility for FCNR(B) deposits, which are foreign-currency term deposits from non-resident Indians. By August 31, 2026 the bank had mobilised about $17.88 billion of these deposits under the facility. Its international branches and subsidiaries had lent about $9.00 billion against them. The effect shows across the balance sheet: - Period-end deposits were $213.91 billion, up 17.7% (27.1% in rupees) year on year and 11.8% in rupees in the quarter. Excluding FCNR(B) deposits, rupee growth was 17.0% year on year and 3.1% in the quarter. - The average CASA ratio fell to 35.8%, which the bank attributes to the larger term-deposit base from FCNR(B) inflows. Average current and savings deposits still grew 10.7% year on year in rupees. - Advances were $191.13 billion, up 20.5% (30.0% in rupees) year on year and 12.3% in rupees in the quarter. Excluding loans that international branches made against FCNR(B) deposits, rupee growth was 24.1% year on year and 7.3% in the quarter. Overseas loans rose to 7.8% of the loan book. - Standalone borrowings, including subordinated debt, rose 60.0% in the quarter to $21.35 billion (62.0% in rupees). The standalone debt-to-equity ratio, which counts borrowings due after more than one year, doubled from 0.17 to 0.35. **Loan mix.** In rupees, retail and rural loans grew 14.8% year on year and made up 51.6% of loans. Business banking grew 33.8% and the domestic corporate book 30.6%, so domestic advances grew 22.8%. **Earnings.** Profit after tax was $1.55 billion, up 9.7% (20.1% in rupees). Consolidated profit after tax was $1.71 billion, up 11.7% (22.3%). - Profit before tax excluding treasury rose 12.8% to $2.09 billion (23.4%), and core operating profit rose 11.3% to $2.18 billion (21.8%). Dividends from subsidiaries were lower than a year earlier. Excluding them, core operating profit rose 25.0% in rupees. - Net interest income rose 7.5% to $2.65 billion (17.7%). The net interest margin was 4.18%, down from 4.36% in the June quarter (4.28% there excluding interest on tax refunds) and from 4.30% a year earlier. - Fee income rose 9.7% to $815.30 million (20.1%). Retail, rural and business-banking customers generated about 75% of fees. - Operating expenses were $1.34 billion, down 0.9% in dollars but up 8.5% in rupees. - Treasury posted a $24.06 million loss, against gains in both comparison quarters, which the bank attributes mainly to market movements. - Provisions fell 14.9% to $89.01 million (down 6.9% in rupees). **Asset quality kept improving.** The gross NPA ratio was 1.20%, against 1.38% at June 30 and 1.58% a year earlier. The net NPA ratio was 0.30%, against 0.35% and 0.39%. Gross NPA additions were $505.50 million, down 12.3% (4.0% in rupees). Write-offs were $166.51 million, and provision coverage on non-performing loans was 75.0%. Performing corporate exposure rated BB and below was $370.13 million. Beyond specific provisions, the bank held $2.49 billion of other provisions, about 1.3% of loans. That figure includes the contingency provision, unchanged in rupees and now $1.37 billion. The bank separately still holds the $133.88 million RBI-directed agricultural provision. **Capital.** Total capital adequacy was 16.68% and CET1 16.01% on a standalone basis, against regulatory minimums of 11.70% and 8.20%. The branch network grew by 145 in the half-year to 7,656, with 12,143 ATMs and cash-recycling machines. **Subsidiaries.** In the life insurance subsidiary, now ICICI Life Insurance Limited: - Annualised premium equivalent for the half-year rose 4.7% to $518.81 million (15.1% in rupees). - Value of new business rose 11.2% to $134.88 million (22.3%), with a 26.0% margin against 24.5% a year earlier. - Second-quarter profit after tax rose 14.3% to $39.12 million (25.1%). At ICICI Lombard: - Gross direct premium income was $710.40 million, down 5.9% in dollars but up 3.0% in rupees. - The combined ratio worsened to 107.0% from 105.1%, or 105.3% excluding catastrophe losses. - Profit after tax rose 5.4% to $98.95 million (15.4%). ICICI Prudential Asset Management earned $92.98 million under Ind AS, down 3.1% in dollars and up 6.1% in rupees. **Raising its ICICI Life stake.** Through market purchases in July–September 2026, the bank lifted its ICICI Life stake by about 2% to about 52.8% (Form 6-K, accession 0000950103-26-013533). The 20-F says the purchase is mainly meant to protect the bank's majority against dilution from ICICI Life's stock-based compensation. The consolidated accounts recognise $122.97 million of goodwill on it. The life insurer's name change from ICICI Prudential Life Insurance Company Limited follows from PCHL's May 17, 2026 agreement to buy 75% of Bharti Life Insurance Company. IRDAI approved the new name on August 7, 2026, and ICICI Life's board approved it on August 13 (annual securities report furnished on Form 6-K, accession 0000950103-26-014340). The quarterly results use the new name. ## Subsequent events *Sources: Form 20-F for fiscal 2026, accession 0000950103-26-010820 (consolidated financial statements, note on U.S. GAAP differences, and "Risk Factors"); Forms 6-K furnished October 6, 2026 (accession 0000950103-26-015233) and October 22, 2026 (accession 0000950103-26-015987).* The interim results carry no subsequent-events note. The bank's filings from October 1 through October 22, 2026 disclose no acquisition, divestiture or new financing after September 30. One matter is still open from the annual report, and two developments followed the quarter: - **Pending change of control of ICICI Life under U.S. GAAP.** This is the 20-F's non-adjusting subsequent event. No filing through October 22, 2026 reports it as completed. ICICI Life is already consolidated in the Indian GAAP accounts. Because of PCHL's agreement to buy 75% of Bharti Life Insurance, ICICI Life has applied to IRDAI to reclassify PCHL from "promoter" to "investor". Under a July 4, 2026 letter of undertaking between the bank and PCHL, PCHL will abstain from voting on special resolutions, its nominee director has resigned and it will nominate no replacement until the reclassification takes effect. Once it does, ICICI Life's articles are to be amended. The bank would then obtain control of ICICI Life under U.S. GAAP without changing its ownership, and would have to consolidate ICICI Life line by line in its U.S. GAAP reporting. Its equity-method carrying amount there was $1.42 billion at March 31, 2026. Remeasuring the existing stake at fair value would, the bank says, produce a "material, non-recurring gain/(loss)". The bank cannot yet estimate the amount, and the timing depends on regulatory approvals not yet received. - **ICICI Life leadership (October 2, 2026).** Anup Bagchi is stepping down as ICICI Life's Managing Director & CEO. Sidharatha Mishra moves over from the bank to succeed him, subject to IRDAI approval. - **Board chair (October 17, 2026).** The board will seek RBI approval to keep Pradeep Kumar Sinha as Chairperson from July 1, 2027 to February 16, 2029.