IDBI Bank Q2 results show core profit growth as asset quality improves

IDBI Bank has reported a net profit of Rs 2,205 crore for the second quarter of FY27, reflecting sustained operational strength and continuous improvement in its credit profile.

While the headline net profit fell 39% from Rs 3,627 crore recorded in the same period last year, the comparison is distorted by a one-off exceptional gain. During the second quarter of FY26, the bank earned Rs 1,699 crore from selling a strategic stake in National Securities Depository Limited (NSDL). Excluding that transaction, the lender's net profit grew 14% year-on-year, while operating profit surged 59%.

Core operating performance and margins

The bank's underlying profitability was bolstered by expanding margins and steady growth in core business activities. Net interest margin improved by 40 basis points year-on-year and 50 basis points sequentially to reach 4.11%.

Discrepancies appeared across financial reports regarding net interest income figures due to differing accounting bases applied to prior-year adjustments. However, the lender's core operational metrics underscored strong revenue generation, supported by healthy credit demand across retail and corporate segments.

Balance sheet expansion and asset quality

IDBI Bank continued to strengthen its balance sheet, with both deposits and lending advances recording double-digit expansion over the past year.

The proportion of current account and savings account (CASA) deposits stood at 43.82% of total deposits. On the lending side, the bank maintained a balanced credit mix, with retail loans accounting for 69% of gross advances and corporate loans making up the remaining 31%.

Asset quality metrics reflected ongoing risk management successes. Gross non-performing assets dropped to 2.12% as of September 30, 2026, down from 2.65% a year earlier. Net non-performing assets edged lower to 0.17%. The bank's provision coverage ratio, including technical write-offs, remained fortified at 99.24%, maintaining its track record of staying above 99% since late 2023.