HDFC and ICICI well-placed to against uncertain operating backdrops: report

The two banks will enter FY2027 in a position of strength, said CreditSights.

HDFC Bank and ICICI Bank are well-placed to navigate the uncertain operating backdrop brought about by oil price shocks and tariffs, according to CreditSights, a Fitch Solutions service.

The two banks enter the fiscal year 2027—which for India begins on 1 April 2026—in a position of strength. The two banks delivered strong Q4s with healthy loan and deposit growth momentums, said CreditSights.

Their net interest income growth is expected to be uspported by decent loan growth in FY2027.

“Non-interest income should also remain a supportive, albeit less uniform, earnings lever in FY207, with healthy fee income momentum helping offset potentially softer market-related income on the back of greater [Reserve Bank of India] scrutiny on FX positions and upward pressure on bond yields,” CreditSights said.

Asset quality should remain well-manageable in FY27 despite heightened external risks including the Iran conflict and a weaker monsoon outlook, it added. Credit costs may rise, however.

Loan growth could also slow from the high FY2026 base, as the banks take greater underwriting caution in agriculture, micro small and medium enterprises (MSMEs), and retail unsecured lending, amongst other sectors. Loan growth should remain healthy during the fiscal year.

Recent governance headlines surrounding HDFC Bank is not expected to have a meaningful impact, according to CreditSights.

“[An] external legal review is underway covering the last two years of board operations and whistleblower complaints; the board will commence a chairman search soon and address the CEO’s reappointment in due course,” CreditSights wrote.

The term of HDFC Bank’s CEO, Sashidhar Jagdishan, is set to end in October 2026.