The TechQuilt HDFC and ICICI Bank Report Record Q1 Profits Amid Margin Concerns
India’s top private banks, HDFC Bank and ICICI Bank, delivered stunning results for the April–June 2025 quarter. Both posted record profits, driven by strong growth in interest and non‑interest income, even as they voiced caution about future margin pressures.
Highlights from Q1 2025
- HDFC Bank recorded a 12.2% rise in standalone net profit, reaching ₹18,155 crore, up from ₹16,175 crore a year earlier. This growth was fueled by a 103.7% surge in other income, tax savings, and healthy deposit trends. The bank also announced a 1:1 bonus share issue and an interim dividend of ₹5 per share.
- ICICI Bank saw its net profit grow 15.5% year-on-year to ₹12,768 crore, outpacing analyst forecasts. Net interest income rose 10.6% to ₹21,635 crore, buoyed by robust growth in business loans (up 29.7%). The bank also announced plans to acquire its pension subsidiary amid broader expansion.
Margin Pressure & Strategic Caution
Both banks flagged margin compression due to the Reserve Bank of India’s rate cuts. With lending rates easing more quickly than deposit rates, profit margins have tightened.
In response, ICICI adopted a measured approach by slowing growth in high-risk unsecured lending, while HDFC voiced caution regarding retail loans. Both aim to maintain strong asset quality as they navigate market headwinds.
Business Growth & Asset Quality
- Loan growth remained healthy: HDFC saw an 8% rise in advances and over 16% in deposits. ICICI reported a 12% increase in its loan book, supported by strong business lending.
- Asset quality improved: ICICI’s gross non-performing assets ratio fell to 1.67%, compared to 2.15% last year. HDFC’s provisions rose but results still reflected prudent management.
What This Means for Investors
The strong Q1 performance reinforces investor trust in both banks, with HDFC and ICICI among the top performers in the banking index. Analysts predict continued cautious growth ahead, thanks to healthy lending trends and stable asset quality.
Conclusion
HDFC and ICICI have raised the bar with impressive Q1 performance, combining strong profit growth with disciplined risk management. As they brace for potential margin compression and evolving credit conditions, their cautious stance and strong fundamentals should help them sustain growth into the rest of the fiscal year.
To explore the full breakdown of their stellar quarterly results, check out this in‑depth report on HDFC and ICICI Bank’s record earnings and margin strategy.
