HDFC Bank Vs ICICI Bank: Which bank performed better in Q3 FY26?

Synopsis: HDFC Bank and ICICI Bank both saw investor reactions after the Q3 FY26 results were declared. However, HDFC Bank’s profitability was strong while ICICI Bank maintained higher margins.

India’s two major private banks, HDFC Bank and ICICI Bank, are back in the spotlight following their Q3 FY26 results. The figures have caught investors’ eyes, one bank delivered robust profit growth and highlighted its vast scale, while the other continued to stand out with healthy margins and a resilient balance sheet.

However, profits are just one piece of the puzzle. A closer look, examining NII growth, loan trends, deposit figures, asset quality, and key ratios, reveals where the real contrasts lie. So, which bank actually had the stronger quarter? And realistically, which one seems positioned to take the lead going forward? In this article, we will try to answer that.

Revenue and Profitability

HDFC Bank reported a Net Interest Income (NII) of Rs 32,620 crore in Q3 FY26, representing a 6.4 percent growth from Rs 30,650 crore in Q3 FY25. Additionally, it recorded a growth of 3.4 percent from its previous quarter figure of Rs 31,550 crore.

Coming to its profitability front, HDFC Bank reported a net profit growth of 11.5 percent to Rs 18,650 crore in Q3 FY26 as compared to Rs 16,740 crore in Q3 FY25. Additionally, on a quarterly basis, it recorded a slight growth of 0.1 percent from Rs 18,640 crore.

On the other hand, ICICI Bank reported a Net Interest Income (NII) of Rs 21,932 crore in Q3 FY26, which is a growth of 7.7 percent from Rs 20,371 crore in Q3 FY25. Additionally, it recorded a growth of 1.87 percent from its previous quarter figure of Rs 21,529 crore.

Coming to its profitability front, ICICI Bank reported a net profit decline of 4 percent to Rs 11,318 crore in Q3 FY26 as compared to Rs 11,792 crore in Q3 FY25. Additionally, on a quarterly basis, it recorded a decline of 8.4 percent from Rs 12,359 crore.

Asset Quality 

HDFC Bank’s asset quality strengthened during the period. GNPA declined by 20 bps to 1.2 percent as compared to 1.4 percent in Q3 FY25. Also, NNPA declined by 10 bps and currently stands at 0.4 percent as compared to 0.5 percent in Q3 FY25. 

On the other hand, ICICI Bank’s asset quality also followed the same trend. GNPA decreased by 43 bps to 1.53 percent as compared to 1.96 percent in Q3 FY25. Also, NNPA decreased by 5 bps and currently stands at 0.37 percent as compared to 0.42 percent in Q3 FY25. 

Deposits and Advances Growth

HDFC Bank’s average deposits grew by 12.2 percent to Rs 27,52,400 crore in Q3 FY26 as against Rs 24,52,800 crore in Q3 FY25. CASA deposits were Rs 9,61,200 crore, with current account deposits at Rs 2,99,500 crore and Savings Account deposits at Rs 6,61,700 crore. CASA deposits accounted for 34 percent of the total deposits as of December 31, 2025.

Coming to total advances, it has a total loan book of Rs 28,44,600 crore, which grew by 12 percent YoY and 2.7 percent QoQ. The company’s retail loan book (Dec’25) is mainly driven by PL (Personal Loans) which forms 30 percent of total retail assets, followed by AL/TW (Auto Loans/Two-Wheeler loans) at 23 percent. Payments contribute 16 percent, while Agri (Agriculture loans) account for 18 percent and the remaining 13 percent comes from Other retail segments.

On the other hand, ICICI Bank’s average deposits have increased by 8.7 percent to Rs 15,86,088 crore in Q3 FY26 as against Rs 14,58,489 crore in Q3 FY25. CASA deposits were Rs 6,67,590 crore, with current account deposits at Rs 2,17,987 crore and Savings Account deposits at Rs 4,49,603 crore. CASA deposits accounted for 39 percent of the total deposits as of December 31, 2025. 

Coming to total advances, it has a total loan book of Rs 14,66,154 crore, which grew by 11.5 percent YoY and 4.1 percent QoQ, where 51.2 percent of its loan book is exposed to Retail, followed by 20.7 percent from business banking, 20.1 percent from Domestic corporate and others, 5.7 percent from Rural loans and the remaining 2.4 percent from overseas operations.

Other Key Ratios

HDFC Bank reported a Net Interest Margin of 3.4 percent, which remained flat YoY but grew 10 bps QoQ. It reported an ROE and ROA of 13.9 percent and 1.92 percent respectively. Cost to Income declined by 140 bps YoY to 39.2 percent.

On the other hand, ICICI Bank reported a Net Interest Margin of 4.30 percent, which grew 5 bps YoY butstayed flat QoQ. It reported an ROAA (return on average assets) and ROE of 2.11 percent and 14.7 percent respectively. Cost to Income also increased significantly by 230 bps YoY and by 20 bps QoQ to 40.8 percent.

So in conclusion, HDFC Bank surged ahead in profits and scale in Q3 FY26. Net profit rose 11.5 percent year-on-year to Rs 18,650 crore, driven by steady NII growth and strong gains in both deposits and advances. They also tightened control on expenses where cost-to-income fell to 39.2 percent, signaling effective cost management.

ICICI Bank, by contrast, performed well in margins and improving asset quality, but its profits lagged behind. NII growth stayed strong, NIM was a solid 4.30 percent, yet profit declined 4 percent year-on-year to Rs 11,318 crore, and the cost-to-income ratio edged higher. So, while HDFC leads in earnings and scale, ICICI stands out on margins and a stronger balance sheet.

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