IDBI Bank Q3: Profit Flat YoY at ₹1,935 Cr, But NII Fell 24%—So This Was a “Spread Compression” Quarter

’s Q3 FY26 standalone PAT rose just 1.4% YoY to ₹1,935 crore, while NII dropped 24% YoY to ₹3,209 crore—indicating earnings were protected by non-NII levers/provisions even as core spreads weakened. ​ Sequentially, PAT fell 47% from ₹3,627 crore in Q2, making this a clear QoQ slowdown print. What drove the NII weakness Interest income fell 9% YoY to ₹7,073.55 crore, while interest expense rose 8% YoY to ₹3,864.11 crore—an unfavourable mix that compressed net interest earnings. ​ This is typically what happens when deposit repricing/funding costs rise faster than asset yields, or when the book mix shifts toward lower-yield assets. Balance sheet and asset quality stayed supportive Total business grew 12% YoY to ₹5,46,643 crore, with deposits up 9% YoY to ₹3,07,858 crore and net advances up 15% YoY to ₹2,38,786 crore. ​ Asset quality improved: GNPA fell to 2.57% and NNPA was very low at 0.18%, with PCR at 99.33%. Capital position is strong (and relevant for optionality) Tier-1 rose to 23.53% and CRAR to 24.63% as of Dec 31, 2025, giving substantial capital comfort. ​ Given IDBI’s strategic context, that capital strength can matter for investor perception, but near-term stock reaction will likely hinge on whether NII stabilises and QoQ profit normalises. Source: Economic Times No Recommendation