IDBI Bank reported a 39% year-on-year decline in standalone net profit to ₹2,205 crore for Q2 FY27, compared to ₹3,627 crore in the corresponding quarter of the previous financial year. However, the bank clarified that this decline was primarily due to the absence of a one-off gain of ₹1,699 crore from the strategic sale of NSDL in the year-ago quarter. Excluding this one-off gain, net profit actually rose 14% year-on-year from ₹1,929 crore, demonstrating strong underlying operational performance. The bank's operating profit fell 18% year-on-year to ₹2,893 crore from ₹3,523 crore in Q2 FY26, but excluding the one-off gain, operating profit actually rose 59% from ₹1,824 crore. Sequentially, net profit rose 4% from ₹2,115 crore in Q1 FY27, as per the latest regulatory filing.
The bank demonstrated robust operational performance with net interest income (NII) jumping 29% year-on-year to ₹4,228 crore from ₹3,285 crore in the same quarter of the previous financial year. On a sequential basis, NII grew approximately 21% from ₹3,486 crore. The bank's net interest margin (NIM) improved significantly to 4.11% from 3.71% in the year-ago quarter, an expansion of 40 basis points. NIM also increased 50 basis points sequentially from 3.61% in the June quarter, indicating strong core banking operations and improved asset-liability management. Total interest income increased nearly 20% year-on-year to ₹8,512 crore from ₹7,104 crore, while interest expenses stood at ₹4,284 crore. However, non-interest income fell 46% to ₹1,353 crore in September 2026 from ₹2,489 crore a year earlier, primarily due to the absence of the one-off NSDL gain, which had contributed ₹1,698.96 crore from the strategic investment sale.
IDBI Bank showed significant improvement in asset quality metrics during the quarter, though recent data indicates some deterioration. Gross NPA ratio declined to 2.12% from 2.30% in June 2026 and 2.65% a year ago, while net NPA ratio stood at 0.17% against 0.16% in the previous quarter and 0.21% a year ago. However, latest data shows gross NPAs as a percentage of total loans stood at 2.30% for the September quarter versus 2.12% three months ago, while net NPAs increased to 0.17% from 0.16% in the previous quarter. In absolute terms, gross NPA declined to ₹5,859 crore from ₹6,089 crore quarter-on-quarter, while net NPA increased to ₹460 crore from ₹425 crore. The bank's provision coverage ratio, including technical write-offs, stood at 99.24% at the end of September, demonstrating enhanced risk management and collection efficiency during the quarter. The ratio has remained above 99% since September 2023, with the bank maintaining strong asset quality management despite the challenging operating environment.
Total business increased by 18% year-on-year to ₹6.27 trillion as of September 30, 2026, reflecting strong business momentum. Total deposits grew 17% year-on-year to ₹3.56 trillion, while net advances increased 18% to ₹2.72 trillion. On a sequential basis, deposits increased 7% and net advances expanded 5%. Current account and savings account (CASA) deposits rose 12% year-on-year to ₹1.56 trillion, with the CASA ratio standing at 43.82%, improving 18 basis points from 43.64% in June but slipping 197 basis points from 45.79% a year ago. The corporate-to-retail mix in gross advances stood at 31:69, while the credit-deposit ratio stood at 76.34%, against 79.50% in the previous quarter and 75.88% a year ago. The cost-to-income ratio stood at 48.17%, down 385 basis points from 52.02% in Q1 FY27, though higher than 38.99% a year ago when income was boosted by the NSDL gain. The bank's capital adequacy ratio (CRAR) improved to 27.10% from 25.39% a year earlier, while its Tier 1 capital ratio increased to 26.55% from 23.79%, with the bank reporting a return on assets (ROA) of 1.83% for the September quarter.
The results come after the Cabinet Committee on Economic Affairs approved the sale of IDBI Bank stake on October 14, marking the end of a five-year disinvestment process that began with the Union Budget for 2021-22. Canada-based Fairfax Financial Holdings will acquire a combined 60.72% stake from the government and Life Insurance Corporation of India (LIC) for ₹52,878 crore at ₹81 per share. The government held 45.48% of the bank and LIC 49.24% before the sale, with the deal including a proposed merger of CSB Bank with IDBI Bank within two years, subject to RBI and Sebi approvals. Fairfax holds about 40% of CSB Bank, and the government states the bank's recovery is complete with gross non-performing assets at 2.32% and total business above ₹6.27 lakh crore as of September 2026. Under the transaction, the government will sell its 30.48% stake for approximately ₹26,620 crore, while the Life Insurance Corporation of India (LIC) will divest its 30.24% stake for around ₹26,440 crore. The strategic transaction is expected to be completed before the end of the current financial year, marking a major milestone in India's long-delayed banking privatisation drive.
