Higher interest income supported September-quarter earnings at four major private banks, while narrower margins highlighted the challenge of turning balance-sheet growth into stronger returns.
India’s leading private lenders HDFC Bank, ICICI Bank, Axis Bank and Kotak Mahindra Bank reported higher profits for the quarter ended September 30, 2026. Net interest income increased across all four banks, although lending margins remained under pressure.
The results show why profit growth and margin performance need to be read together. A bank can earn more interest income as its loan book expands while making a smaller interest return relative to its earning assets.
Private banks’ Q2 FY27 results at a glance
| Bank | Net profit | Year-on-year profit growth | Net interest income | Reported NIM |
|---|---|---|---|---|
| HDFC Bank | ₹19,510 crore | 4.7% | ₹34,619 crore | 3.16%* |
| ICICI Bank | ₹14,843 crore | 20.1% | ₹25,339 crore | 4.18% |
| Axis Bank | ₹7,003 crore | About 38% | ₹15,371 crore | 3.36% |
| Kotak Mahindra Bank | ₹4,212 crore | About 29% | ₹8,459 crore | 4.31% |
Figures are rounded and refer to standalone performance. HDFC Bank’s 3.16% margin is calculated on total assets; it reported 3.32% on interest-earning assets. Margin definitions should be checked before comparing banks directly.
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Add INDYASTORY on GoogleHDFC Bank: Profit rises 4.7% as interest income grows
HDFC Bank reported standalone net profit of approximately ₹19,510 crore, compared with ₹18,641 crore a year earlier. Net interest income rose 9.7% to ₹34,619 crore.
The bank reported a net interest margin of 3.16% on total assets and 3.32% on interest-earning assets. Its gross non-performing asset ratio stood at 1.11% at the end of September.
Balance-sheet growth remained firm. Period-end deposits increased 18.8% year on year, while gross advances grew 16.3%. However, provisions increased 2.1%, and non-interest income declined 3.6%, helping explain why profit growth was slower than the rise in net interest income.
ICICI Bank: Profit increases 20.1%, but margin narrows
ICICI Bank’s standalone net profit increased to ₹14,843 crore from ₹12,359 crore in the corresponding quarter last year. Net interest income rose 17.7% to ₹25,339 crore.
Its net interest margin declined to 4.18%, compared with 4.30% a year earlier and 4.36% in the preceding quarter.
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Add INDYASTORY on GoogleOperating expenses increased 8.5%, while provisions excluding tax declined to ₹851 crore from ₹914 crore. The bank also reported a ₹230 crore treasury loss, compared with a ₹220 crore gain a year earlier.
Deposits grew 27.1% year on year. Excluding FCNR(B) deposits, deposit growth was 17%, illustrating the importance of separating underlying deposit expansion from foreign-currency inflows.
Axis Bank: Strong annual profit growth, softer sequential performance
Axis Bank reported net profit of ₹7,003 crore, up about 38% from a year earlier. Net interest income reached ₹15,371 crore, increasing approximately 12%.
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Add INDYASTORY on GoogleThe annual comparison was stronger than the quarterly trend. Profit declined from ₹7,114 crore in the June quarter, while operating profit fell to ₹11,083 crore from ₹11,659 crore.
Reported net interest margin stood at 3.36%. Excluding the FCNR(B) impact, the bank put the margin at 3.47%.
Asset-quality ratios improved: gross NPAs declined to 1.16% from 1.46% a year earlier, while net NPAs fell to 0.35% from 0.44%.
Kotak Mahindra Bank: Profit and interest income advance
Kotak Mahindra Bank posted standalone net profit of ₹4,212 crore, an increase of approximately 29% year on year. Net interest income rose about 16% to ₹8,459 crore.
The bank reported a 4.31% net interest margin. Gross NPAs improved sequentially to 1.04% from 1.18% in June, while net NPAs declined to 0.24% from 0.27%.
Standalone and consolidated earnings should not be confused. Kotak separately reported consolidated profit of ₹5,645 crore, which includes its broader group operations.
Why can interest income rise while margins fall?
Net interest income is the difference between interest earned and interest paid. Net interest margin expresses that income relative to an asset base.
A larger loan portfolio can therefore generate more income even when the percentage margin narrows. Deposit pricing, loan yields, funding composition and the timing of fund deployment can all influence the outcome.
FCNR(B) deposits—foreign-currency deposits held by eligible non-resident customers—also require careful interpretation. Axis Bank’s disclosure of both reported and FCNR(B)-adjusted margins shows why headline deposit growth alone does not explain profitability.
What investors should watch next
The next set of results will help establish whether these banks can sustain income growth while stabilising margins. Relevant measures include deposit costs, current and savings account balances, fresh loan slippages, provisions and core operating profit.
Lower NPA ratios are encouraging, but readers should also examine absolute bad-loan balances and fresh stress. A growing loan book can affect the ratio even when the underlying movement in problem loans is more complicated.
For these four lenders, the September quarter delivered higher annual earnings. The continuing test is how efficiently that growth translates into returns after funding costs, operating expenses and credit provisions.
This report explains financial results and does not constitute a recommendation to buy or sell bank shares.
