MUMBAI, January 17, 2026
India’s banking sector reported mixed results for the third quarter of fiscal year 2025-26 (October-December 2025), with private lenders showing resilience amid rising provisions while public sector banks benefited from improved asset quality.
HDFC Bank, the country’s largest private sector lender, posted an 11% year-on-year increase in standalone net profit to ₹18,654 crore, up from ₹16,735 crore in the same quarter last year. The figure exceeded market estimates of ₹18,473 crore, though it remained largely flat sequentially compared to ₹18,641 crore in Q2 FY2026.
On the same day, major private lender ICICI Bank joined public sector banks UCO Bank and IDBI Bank in announcing results. Higher provisioning weighed on ICICI Bank’s profits, while lower provisions and better asset quality drove gains for UCO Bank.
ICICI Bank The bank’s consolidated net profit declined 2.68% year-on-year to ₹12,537.98 crore from ₹12,883.37 crore, primarily due to provisions more than doubling to ₹2,556 crore. This included ₹1,283 crore set aside in line with Reserve Bank of India guidelines on agriculture loans and ₹145 crore related to new labour laws.
Core operations remained robust, with net interest income (NII) rising 7.7% to ₹21,932 crore, supported by 11.5% loan growth. Net interest margin (NIM) improved marginally by 5 basis points to 4.30%.
IDBI Bank IDBI Bank’s net profit stayed nearly flat at ₹1,935 crore compared to ₹1,908 crore a year earlier. Total income fell to ₹8,282 crore from ₹8,565 crore, with interest income also declining.
On the positive side, asset quality strengthened significantly, with gross non-performing assets (NPA) dropping to 2.57% from 3.57% a year ago. Return on assets (ROA) edged lower to 1.83%. The bank remains in the disinvestment queue, with the government planning to sell its stake above 45% while LIC seeks to retain strategic interest.
UCO Bank Kolkata-headquartered UCO Bank delivered strong performance, with net profit jumping 15.76% to ₹739.51 crore. Total income rose to ₹7,521.16 crore, driven by interest income of ₹6,651.84 crore.
Provisions declined to ₹525.12 crore, aiding profitability. Asset quality improved markedly, with gross NPA falling to 2.41% from 2.91% and net NPA dropping to 0.36% from 0.63%. Capital adequacy ratio strengthened to 17.43%.
The quarter highlighted a continuing positive trend in asset quality across the sector, signalling long-term stability for Indian banks. However, regulatory-driven provisioning created short-term pressure on profits for some larger institutions.
