IDBI Bank’s September-quarter profit fell sharply despite a 29% rise in net interest income, as deposits, advances, asset quality and capital buffers all strengthened.
IDBI Bank reported a sharp drop in quarterly profit even as its lending and deposit franchise continued to expand, underscoring the pressure that can fall on earnings even when core banking income improves. For the three months ended September 30, 2026, the lender said net profit fell 39.2% from a year earlier to Rs 2,205 crore, down from Rs 3,627 crore. That decline came despite a stronger net interest income performance, with the measure rising 29% to Rs 4,228 crore, and despite continued growth in deposits and advances, according to the bank’s exchange filing.
Operating profit weakened by 17.9% to Rs 2,893 crore from Rs 3,523 crore a year earlier, while provisions for the quarter were limited at Rs 8.55 crore. The numbers suggest that IDBI’s headline earnings were pulled lower by factors beyond its core interest spread, even as its underlying business expanded. Total deposits climbed 17% year on year to Rs 3,55,684 crore, helped by a 12% increase in current and savings account deposits to Rs 1,55,877 crore. The CASA ratio stood at 43.82% at the end of the quarter, a sign that the bank continued to maintain a relatively low-cost funding base.
Loan growth also remained solid. Net advances increased 18% from a year earlier to Rs 2,71,533 crore, with retail loans accounting for 69% of gross advances and corporate lending making up the remaining 31%, according to the filing. Asset quality improved on a yearly basis, with the gross non-performing asset ratio easing to 2.12% from 2.65% and the net NPA ratio slipping to 0.17% from 0.21%. On a sequential basis, gross bad loans improved from 2.30% in the June quarter, although the net NPA ratio inched up from 0.16%.
The bank also closed the quarter with a stronger capital buffer. Its capital-to-risk-weighted assets ratio rose to 27.10% from 25.39% a year earlier, while Tier 1 capital increased to 26.55% from 23.79%. Risk-weighted assets stood at Rs 2,37,228 crore, up from Rs 2,08,546 crore in September 2025 and higher than the June quarter level. The results came days after the Cabinet Committee on Economic Affairs approved the sale of the government and Life Insurance Corporation of India’s combined 60.72% stake in IDBI Bank to Canada-based Fairfax Financial Holdings for Rs 52,878 crore, a long-delayed transaction that also includes a proposed merger of CSB Bank with IDBI Bank within two years, subject to regulatory approvals.
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