ICRA Ratings has reaffirmed its ratings on the long-term debt instruments of IDBI bank Limited(IDBI Bank) at ICRA AA(Long-term Bonds)/ Stable and short-term rating on certificate of deposit ....

3TTWm{ }a Rh& IDBI Bank Limited ddtVa ©rqf@ : wW3r+ Jf4?, Regd. Office : IDBI Tower, g@t:it aTaaWI, onqts, WTC Complex, Cuffe Parade CIN: L65190MH2004G01148838 @ - 400 005. Mumbai - 400 005 if&Hta : (+91 22) 6655 3355 TEL.: (+91 22) 6655 3355 (+91 22) 6655 3405, 3410 (+91 22) 6655 3405, 3410 agarSC : www.idbi.bank.in Website : www.idbi.bank.in August 29, 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 Mumba 400 001 Bandra Kurla Complex, Bandra(E) Mumbai – 400 05 1 Dear Madam/Sir, Rating by ICRA This is to inform you that ICRA Ratings has reaffirmed its rating on the long-term debt instruments of IDBI Bank Limited (IDBI Bank) at 'ICRA AA (Long-term Bonds) /Stable’ and short-term rating on certificate of deposit programme at 'ICRA 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 August 28, 2026 IDBI Bank Limited: Ratings reaffirmed Summary of rating action Previous rated Current rated amount Financial sector Instrument* amount Rating action (Rs. crore) regulator# (Rs. crore) Infrastructure bonds 10,000.00 10,000.00 [ICRA]AA (Stable); reaffirmed SEBI Infrastructure bonds [ICRA]AA (Stable); reaffirmed and 1,000.00 0.00 SEBI withdrawn Senior bonds 3.00 3.00 [ICRA]AA (Stable); reaffirmed SEBI Basel III Tier II bonds 3,100.00 3,100.00 [ICRA]AA (Stable); reaffirmed SEBI [ICRA]AA (Stable); reaffirmed and Basel III Tier II bonds 1,900.00 0.00 SEBI withdrawn Fixed deposits programme - - [ICRA]AA (Stable); reaffirmed -+ Certificates of deposit 35,000.00 35,000.00 [ICRA]A1+; reaffirmed RBI programme Total 51,003.00 48,103.00 *Instrument details are provided in Annexure I # The Securities and Exchange Board of India’s (SEBI) grievance redressal/dispute resolution and SEBI investor protection mechanisms such as SCORES and ODR shall not be available for activities and instruments that fall under the regulatory purview of financial sector regulators (FSRs) other than SEBI + To be finalised following a discussion with the regulatory authorities Rationale The ratings for the various instruments of IDBI Bank Limited continue to factor in the steady improvement in its core operating profitability and its strong capitalisation levels. In addition, recoveries from legacy stress assets continue to aid earnings. This, along with benign credit costs, supports the overall return indicators and healthy capital cushions. The ratings are based on the bank’s standalone credit profile, given the stated intent of its largest shareholders, i.e. Life Insurance Corporation of India (LIC) and the Government of India (GoI), to sell down/divest their stakes, including a transfer of management control. In this regard, ICRA notes that the GoI, acting through the Department of Investment and Public Asset Management (DIPAM), had invited an expression of interest from potential investors in October 2022. Even though the dilution has progressed, the conclusion and eventual finalisation of new stakeholders is still awaited. ICRA also notes that the vulnerable loan book, consisting of special mention account SMA (1.74% of standard advances as on June 30, 2026), and the standard restructured book are at manageable levels. In addition to the high provision coverage, the bank had a contingent provision of Rs. 1,054 crore (0.41% of standard advances) as on June 30, 2026, which remains an added source of comfort. IDBI’s ability to keep incremental credit costs in check, especially given the current geopolitical scenario, would remain monitorable. Further, pressure on the cost of funds would remain high due to the persisting challenges faced by the banking sector in raising deposits at finer rates. As a result, net interest margins (NIMs) are likely to be strained in the interim. The yield upside from the expected rate hikes would support NIMs, but the same is expected to be back-ended in FY2027. ICRA expects recoveries to continue boosting the profitability though the quantum of recoveries is likely to reduce. Although the bank witnessed steady business (advances and deposits) growth, with the pace picking up in FY2026 to 15.34% for advances from 14.25% in FY2025, its share in the sector’s advances and deposits has declined from the peak level as on March 31, 2017. This is due to the growth restrictions under the prompt corrective action (PCA) framework and the subsequently low growth rate in comparison to the sector average for several years. Further, IDBI’s ability to maintain and expand the core deposit base upon any change in ownership would be monitorable. ICRA has reaffirmed and withdrawn the rating assigned to the Rs. 1,000.00-crore infrastructure bonds and Rs. 1,900.00-crore Basel III Tier II bonds as they have been fully redeemed with no amount outstanding against the same. The rating has been withdrawn in accordance with ICRA’s policy on the withdrawal of credit ratings (click here for the policy). www.icra .in 1 Sensitivity Label : Public Page | Key rating drivers and their description Credit strengths Earnings profile improve steadily – The bank has benefitted from the steady growth in advances and the consequent improvement in its core income and profit, further supported by benign credit costs. In addition, IDBI continues to benefit from recoveries from significantly provisioned stressed assets. The operating profitability is aided by strong recoveries from written-off accounts while credit and other provisions also remained low, helping the overall profitability. The bank is witnessing a steady improvement in its core operating profitability (excluding recoveries). The banking sector continues to face challenges in raising granular/retail deposits at finer rates, leading to ongoing pressure on the overall cost of funds. Hence, IDBI is likely to witness some compression in NIMs in the near term. The yield upside from the expected rate hikes would support NIMs, but the same is likely to be back-ended in FY2027. IDBI’s return metrics {return on assets (RoA)} stood at 1.89% in Q1 FY2027 compared with 2.21% in FY2026 and 1.99% in FY2025. Its operating profitability was 2.13% of average total assets (ATA) in FY2026 and improved to 2.34% (annualised) in Q1 FY2027. Further, credit costs remained low, aided by strong recoveries and upgrades and the reduction in slippages. Going forward, IDBI’s ability to maintain strong asset quality on a sustained basis will be a key driver of credit costs, leading to healthy RoA levels. Strong capitalisation and solvency profile – Driven by robust internal accruals, IDBI’s capitalisation profile remains healthy with the Tier I ratio and the capital-to-risk weighted assets ratio (CRAR) at 26.38% and 26.92%, respectively, as on June 30, 2026 (25.56% and 26.65%, respectively, as on March 31, 2026). The higher capitalisation levels, along with the decline in net stressed assets, support the strong solvency1 profile. Though the capitalisation profile was aided by capital infusions by LIC and the GoI in the past, IDBI has remained profitable since FY2021. Further, as per the management’s estimates, the impact of the expected credit loss (ECL) framework on the bank’s capital ratios is expected to be manageable, given the existing healthy provision level and robust capital cushions. Although the ratings are based on IDBI’s standalone credit profile, any change in its parentage will be monitorable. Steady deposit base – IDBI’s deposit base increased by 9.8% year-on-year (YoY) to Rs. 3,25,757 crore as on June 30, 2026, supported by the high share of current account and savings account (CASA) deposits at 43.64%. However, this was slightly lower than 44.59% as on March 31, 2026, reflecting the moderation in the share of low-cost deposits [Showing first 8,000 characters — download PDF for full document]