ICICI Bank Outshines Peers in Q1 FY26 Earnings as Axis, Kotak Struggle

In the first quarter (Q1) of the current fiscal year 2026, ICICI Bank has emerged as the top performer among major private sector banks in India. The bank's strong performance was marked by consistent loan book expansion of 12% and effective margin management, with only a 7 basis point decline in net interest margins (NIMs).

In contrast, other leading private banks faced various challenges during the quarter. HDFC Bank is managing its growth while gradually bringing down its credit-deposit ratio, while Axis Bank's growth remained in single digits for the third straight quarter, raising concerns over its momentum. Kotak Mahindra Bank posted a 14% loan book growth, but this was largely driven by the corporate segment, which did not sit well with the market.

On the profitability front, Axis Bank saw a 17 basis point fall in NIMs, including a 4 basis point technical impact. Kotak Mahindra Bank experienced the steepest decline of 32 basis points in NIMs, which surprised analysts. Additionally, both Axis Bank and Kotak Mahindra Bank struggled with rising credit costs, with Axis Bank seeing an 88 basis point spike and Kotak Mahindra Bank facing a nearly 30 basis point increase, particularly in the microfinance and commercial vehicle segments.

As a result, ICICI Bank not only maintained its ground but also improved its return on assets (RoA) sequentially, while HDFC Bank held its RoAs steady. Axis Bank, however, saw its profit dip by ₹600 crore, with a 15 basis point RoA impact. Kotak Mahindra Bank fared the worst, with its RoAs dropping 24 basis points due to declining net interest margins, rising credit costs, and a shift in loan mix leading to lower net interest income.