IDBI Bank Q3 Results: Profits Rise But NIM Falls, Asset Quality Turns Gold; Gross NPA Down 100 Bps YoY

The Board of Directors of IDBI Bank Ltd. met in Mumbai today and approved the financial results for the quarter and nine months ended December 31, 2025. IDBI Bank delivered a stable operating performance in the third quarter of FY 2026, with net profit rising marginally to Rs 1,935 crore, compared to Rs 1,908 crore in the same quarter last year.
Despite margin reduction, the bank's operating profit of Rs 1,917 crore demonstrated consistent profit progress. Healthy profitability levels were shown by Return on Equity (ROE) of 14.49% and Return on Assets (ROA) of 1.83%.

The bank maintained tight control over funding costs, with the cost of deposits unchanged at 4.62% year-on-year, while the cost of funds improved to 4.74% from 4.82% a year ago. Net Interest Margin (NIM) stood at 3.52%, and the cost-to-income ratio increased to 56.61%, reflecting higher operating expenses during the quarter.

Over the course of the quarter, IDBI Bank's total business climbed to Rs 5,46,643 crore, representing a 12% year-on-year rise. Due to consistent institutional and retail inflows, total deposits increased by 9% YoY to Rs 3,07,858 crore. With a CASA ratio of 44.06% and a CASA balance of Rs 1,35,632 crore, the funding base was solid and affordable. Net advances on the asset side climbed significantly by 15% YoY to Rs 2,38,786 crore, mostly due to the expansion of credit led by customers. With a corporate-to-retail gross advances ratio of 29:71, the bank demonstrated its growing emphasis on retail lending while maintaining a safe portfolio composition.

During the third quarter of FY 2026, the bank's asset quality significantly improved. Gross non-performing assets (NPA) dropped to 2.57%, a notable 100 basis point drop from 3.57% during the same quarter last year. Net NPA stayed remarkably low at 0.18%, indicating effective strategies for recovery and resolution. The bank's cautious provisioning strategy and enhanced balance sheet resilience against potential strains were highlighted by the Provision Coverage Ratio (including technical write-offs), which stayed robust at 99.33%.

Throughout the quarter, IDBI Bank's capital position improved even further, offering plenty of room for future expansion. The Capital to Risk-Weighted Assets Ratio (CRAR) of the bank increased from 21.98% to 24.63% in the previous year. Profit accretion and bank sheet optimization saw Tier-1 capital soar to 23.53% from 19.91% the year before. In keeping with company growth, risk-weighted assets rose to Rs 2,11,567 crore while maintaining good capital adequacy considerably beyond regulatory norms.

IDBI Bank received significant industry acclaim for its operational and digital performance during the quarter. M1 Xchange recognized the bank's exceptional contribution to the TReDS platform by awarding it "Best Private Sector Bank - Highest Throughput & Digital Adoption" at the SAMAAH event. IDBI Bank's dedication to strong risk controls, cybersecurity, and customer trust was further reinforced when it was awarded the ET BFSI Exceller 2025 Award for Excellence in Security and Fraud Risk Management.