From NIMs to NPAs: ICICI vs HDFC – Who Outperformed in Q4 FY25?

India’s two largest private sector banks, ICICI Bank and HDFC Bank, recently announced their financial results for FY25, offering a comprehensive view of their performance. While both institutions have shown consistent growth, a deeper look at key financial metrics reveals how they stack up against each other across profitability, asset quality, and market positioning.

ICICI Bank vs HDFC Bank Q4 FY25 Key Metrics

ICICI Bank’s performance in FY25 has stood out in comparison to HDFC Bank. The bank reported a net interest margin (NIM) of 4.3%, higher than HDFC Bank’s 3.5%. HDFC Bank’s NIM returned to its FY23 level of 4.1%, particularly following its merger with HDFC.

ICICI Bank has also outpaced HDFC Bank in terms of return on average assets (RoAA), with a RoAA of 2.4% compared to HDFC Bank’s 1.9%. In addition, ICICI Bank’s total assets saw a 13% growth in FY25, whereas HDFC Bank experienced an 8% increase.

ICICI Bank vs HDFC Bank Advances and Deposits

ICICI Bank’s advances (loans and securitised loans) grew by 14% in FY25, matching the growth in deposits, which is an indication of well-balanced financial management. In contrast, HDFC Bank’s advances grew at half the pace of its deposit growth, indicating a slower pace of loan disbursal.

Risk-Weighted Assets and Credit Cost Management

ICICI Bank has taken on more risk than HDFC Bank, as evidenced by a higher risk-weighted assets-to-total assets ratio (76% compared to HDFC Bank’s 68%).

Meanwhile, ICICI Bank’s credit cost (cost of bad debt) stood at 35 basis points, almost equal to HDFC Bank’s, demonstrating its ability to manage risks effectively despite the higher exposure.

NPA Trends and Asset Quality for ICICI Bank and HDFC Bank

ICICI Bank’s Gross non-performing assets (NPA) addition was lower at 1.6% in Q4FY25, a 20 basis point improvement from the previous year. The management has stated that there is no significant stress expected on asset quality in the near future.

As of December 31, 2024, HDFC Bank’s gross non-performing assets (NPAs) stood at 1.42% of gross advances (1.19% when excluding NPAs in the agricultural sector), compared to 1.26% as of December 31, 2023 (1.11% excluding agricultural NPAs). 

The bank also reported that net non-performing assets were at 0.46% of net advances as of December

Share Price Performance 

As of April 24, 2025, HDFC Bank’s share price stands at ₹1,921.20, showing a slight decrease of ₹2.70 or 0.14% from the previous close of ₹1,923.90. The stock reached a high of ₹1,923.90 and a low of ₹1,905.10 during the trading session.

On the other hand, ICICI Bank’s share price is at ₹1,407.70, down ₹16.70 or 1.17% from its previous close of ₹1,424.40. The stock experienced a high of ₹1,421.20 and a low of ₹1,406.10 during the day’s trading activity.

Read More: TCS vs Infosys vs Wipro: Which IT Giant Delivered Highest Profits in Q4FY25?

Conclusion

In summary, ICICI Bank has demonstrated stronger overall performance in FY25 compared to HDFC Bank, particularly in areas like net interest margin, return on average assets, and balanced growth in advances and deposits. 

While ICICI has taken on slightly more risk, it has managed its credit costs effectively, maintaining healthy asset quality. HDFC Bank, on the other hand, continues to stabilise post-merger, with steady but relatively slower growth in key financial metrics.

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