Credit Rating

aTW3TT{ $a %Bvag IDBI Bank Limited (DIDBI BANK +aWIT-f'- : „W3„f ;T„, Regd. Office : IDBI Tower, s@left tRinawi. onqts. WTC Complex, Cuffe Parade, CIN: L65190MH2004G01148838 @ - 400 005. Mumbai - 400 005 af&6Ta : (+91 22) 6655 3355 TEL.: (+91 22) 6655 3355 (+91 22) 6655 3405, 3410 (+91 22) 6655 3405, 3410 a4:IISa : www.idbl.bank.in Website : www.idbi.bank.in September 19, 2026 The Manager (Listing) The Manager (Listing) BSE Ltd National Stock Exchange of India Ltd 25th Floor, Phiroze Jeejeebhoy Towers, Exchange Plaza, 5th Floor DalaI Street, Fort, Plot No. C/1, G Block, Mumbai – 400 001 Bandra Kurla Complex, Bandra(E) Mumba 400 05 1 Dear Madam/Sir, Rating by India Ratings This is to inform that India Ratings has affirmed its rating of IDBI Bank’s Fixed Deposits at 'IND AA/Stable’ and Certificate of Deposits at 'IND Al+’. The detailed report is attached herewith. You are requested to kindly take the above intimation on record in terms of Regulations 30 & 51 of SEBI (LODR) Regulations, 2015. Yours faithfully, For IDBI Bank Ltd. Company Secretary India Ratings Affirms IDBI Bank’s Fixed Deposits at ‘IND AA’/Stable and Certificate of Deposits at ‘IND A1+’ Sep 18, 2026 | IDBI Bank Limited | Private Sector Bank India Ratings has taken the following rating actions on IDBI Bank Limited’s (IDBI) debt instruments: Details of Instruments Instrument Regulator of Date of Coupon Maturity Size of Issue Rating Assigned along Rating Description Instrument Issuance Rate (%) Date (INR million) with Watch/Outlook Action Fixed deposits + - - - - IND AA/Stable Affirmed Certificate of RBI - - Up to 365 350,000 IND A1+ Affirmed deposit days Senior debt* Refer ISIN - - - 40 WD Withdrawn annexure Omni Refer ISIN - - - 10,000 WD Withdrawn Infrastructure annexure bonds* Basel III- Refer ISIN - - - 19,000 WD Withdrawn compliant Tier II annexure bonds* +To be finalised following a discussion with the regulatory authorities. *Details in annexure Analytical Approach Ind-Ra continues to fully consolidate IDBI’s subsidiaries while arriving at the ratings. The agency has not factored in capital support from its majority stakeholders — the government of India (GoI) and Life Insurance Corporation of India (LIC) — to arrive at the ratings, owing to their planned strategic divestment in the bank. Detailed Rationale of the Rating Action The ratings reflect the bank’s comfortable capitalisation, stable and granular deposit franchise with a strong current account and saving account (CASA) profile, improving asset quality metrics, and a retail-focused loan portfolio that supports earnings stability and portfolio diversification over FY26. The bank’s profitability improved in FY26, aided by healthy margins, declining credit costs, and controlled operating expenses, resulting in improved internal capital generation. Ind-Ra notes that LIC and the GoI collectively held a 94.72% stake in the bank as of 1QFY27. Both shareholders have expressed their intention to divest up to 60.72% of their shareholding, including the transfer of management control, through a strategic stake sale. The divestment process remains underway and will remain a rating monitorable. List of Key Rating Drivers Strengths Comfortable capital position Stable deposit franchise with strong CASA profile Improving trend in asset quality Continued retail focus Improved profitability profile Weaknesses Home loan business issue unresolved; RBI extension in place Detailed Description of Key Rating Drivers Comfortable Capital Position: IDBI maintains a strong capital base, offering resilience for growth and risk absorption. The bank’s internal accruals have been improving since FY21, leading to an improvement in its common equity tier 1 (CET1) ratio to 26.38% in 1QFY27 (FY26: 25.56%; FY25: 23.51%, FY24: 20.11%). Ind-Ra expects the bank’s internal capital generation to be sufficient to support its medium-term growth plans, with no material need for external capital infusion. Further supporting its credit profile, the bank had a strong provision coverage ratio (PCR; excluding technical write-offs) of 93.01% in 1QFY27 (FY26: 93.70%). Ind-Ra notes that IDBI’s capital buffers are maintained above the regulatory thresholds and provide cushion for expected credit loss (ECL) implementation. The bank’s preparedness for the implementation of ECL norms will remain a key rating monitorable. Stable Deposit Franchise with Strong CASA Profile: The bank’s CASA deposit ratio declined to 43.64% in 1QFY27 (FY26: 44.59%; FY25: 46.56%; FY24: 50.43%). The agency believes competitive intensity to accrete low-cost deposits will remain high among banks in the near term. IDBI’s current account balance reduced to 15.76% in 1QFY27 (FY26: 18.37%; FY25: 20.02%; FY24: 17.65%), with the savings account balance increased to 27.88% in 1QFY27 (FY26: 26.23%; FY25: 26.55%; FY24: 32.78%). The cost of deposits reduced to 4.59% in 1QFY27 (4QFY26: 4.69%; 3QFY26: 4.72%). Ind-Ra opines that competition among banks for garnering CASA deposits will continue to remain systematically higher. Therefore, an improvement in IDBI’s CASA franchise will be a strong reflection of its sustainable low-cost liability franchise. The bulk deposits accounted for 22.09% of the bank’s term deposits in 1QFY27 (FY26: 23.76%; FY25: 21.44%; FY24: 15.05%), indicating its loan growth appetite where it is targeting to grow, at least in line with system credit growth. Improving Trend in Asset Quality: IDBI’s asset quality metrics continued to improve in 1QFY27, with the gross non- performing assets (NPAs) declining to 2.30% (FY26: 2.32%; FY25: 2.98%; FY24: 4.53%) and the net NPAs at 0.16% in 1QFY27 (FY26: 0.15%; FY25: 0.15%; FY24: 0.34%), aligning well with its peers. The consistent decline in gross NPAs and net NPAs reflects the bank’s enhanced risk management framework across corporate and retail segments through centralised loan processing, enhanced monitoring, and exposure controls. Furthermore, its retail credit processes rely on rule-based filters, supported by continuous portfolio tracking. The slippage ratio (annualised) remained stable at 0.60% in 1QFY27 (FY26: 0.63%; FY25: 0.73%; FY24: 1.92%). The PCR, excluding technical write-offs, remained robust at 93.01% in 1QFY27 (FY26: 93.70%; FY25: 94.96%; FY24: 92.78%). Additionally, the bank maintained a low special mention account (SMA) portfolio with SMA-1 and SMA-2 together accounting for just 0.9% as of 1QFY27 (1QFY26: 1.2%) of the total gross advances. Ind-Ra expects the gross and net NPAs to remain stable over FY27-FY28. Continued Retail Focus: IDBI bank continues to focus on retail loans, which accounted for 70% of its advances as of 1QFY27 (FY26: 70%; FY25: 70%; FY24: 70%). In line with its strategy, the bank intends to maintain retail loans at 70% of the overall loan book. The portfolio remained predominantly retail-oriented, with structured retail advances comprising 41.32% of total advances as of 1QFY27 (1QFY26: 44.91%), primarily constituting housing loans. The bank's housing loan portfolio increased to INR763.16 billion as of 1QFY27 (1QFY26: INR689.98 billion), reflecting its continued focus on granular retail asset growth. Non-structured retail advances increased to 28.95% of the total advances as of 1QFY27 (1QFY26: 25.29%), supported by 36.50% yoy growth in gold loans, contributing 8.54% as of 1QFY27 (7.60%), and 32.52% yoy rise in MSME lending. Improved Profitability Profile: The bank’s profitability improved, supported by comfortable net interest margins (NIMs), lower credit costs, and improved operating efficiency. IDBI’s NIM remained comfortable but moderated to around 3.6% in 1QFY27 (1QFY26: 3.7%; FY26: 3.8%; FY25: 4.6%), mainly supported by low cost of deposits and a healthy CASA profile. Its NIM remained in line with its peers given the repo rate cut environment. The bank reported a return on average assets (RoA) of 2.3% in FY26 (FY25: 1.9%; FY24: 1.6%). On the credit costs front, the bank’s credit costs as per Ind-Ra calculatio [Showing first 8,000 characters — download PDF for full document]