HDFC Bank Q2FY26 net profit rises 10.8% to Rs 18,640 crore

MUMBAI: HDFC Bank reported a 10.8% rise in standalone net profit to Rs 18,640 crore for the quarter ended Sept 2025, driven by higher non-interest income and steady improvement in asset quality.Net interest income rose 4.8% year-on-year to Rs 31,550 crore, while non-interest income surged 25% to Rs 14,350 crore. Total income grew 10.4% to Rs 45,900 crore. Operating expenses rose 6.4% to Rs 17,980 crore, and provisions increased 29.6% to Rs 3,500 crore. Profit before tax climbed 11% to Rs 24,420 crore. The net interest margin on total assets was 3.27%, with a core margin of 3.4% on interest-earning assets.Managing director and CEO Sashidhar Jagdishan said economic activity was visibly improving across customer and product segments, aided by the combined effect of tax benefits, GST and interest rate cuts. “In this background, we have an opportunity to accelerate loan growth, which is what we have started to do from this quarter.

We believe that this will sustain and continue, but of course we have to wait and watch,” he said.He added that the bank had deliberately slowed growth in FY25 to reduce the credit–deposit ratio from 110% at the time of the merger to 96.5%. “We seem to be in line with the trajectory we had planned for FY26 and expect to grow faster than the system and gain market share in FY27,” Jagdishan said.He said the bank remained well-positioned from a capital and distribution perspective, maintaining stability across key metrics such as NIM, cost-to-income ratio and return on assets.

Some margin volatility was expected, he said, as deposits would take longer to reprice than loans.Jagdishan emphasised that the bank’s asset quality remained its strongest feature, with key ratios holding steady for a long period. He said HDFC Bank was continuing to invest in technology and distribution as part of its long-term strategy. “A large part of our investments so far has been in core platforms, middleware and some of the emerging technologies, including GenAI,” he said.

The bank has also created its own innovation unit focused on “lighthouse experiments” aimed at re-engineering processes, cutting turnaround times, improving customer experience and delivering tangible benefits over the next 18–24 months.“Our broad strategy, which we had envisaged last year, is on track, and we are quite excited to be in this sector and this country at the inflection point we are seeing now,” Jagdishan said.Deposits rose 12.1% year-on-year to Rs 28 lakh crore at the end of Sept 2025, while advances grew 9.9% to Rs 27.7 lakh crore. The retail-to-wholesale loan mix was steady at 56:44. The CASA ratio was 34%, compared with 35% a year earlier.Asset quality improved, with gross NPAs declining to 1.24% from 1.4% and net NPAs at 0.4% against 0.5% a year earlier. Excluding agriculture loans, the GNPA ratio was 0.99%. Credit cost, net of recoveries, rose slightly to 37 basis points from 29 basis points.The total capital adequacy ratio improved to 20%, while the CET1 ratio rose to 17.5%. The bank added 453 branches during the year, taking the total to 9,545, and increased its customer base to 99 million from 96 million a year earlier. Total assets grew 8.5% to Rs 40 lakh crore, and equity and reserves rose 12.7% to Rs 5.2 lakh crore.Commenting on the draft guidelines on acquisition financing, Jagdishan said it was too early to offer a detailed view. “In summary, I think it’s a very good positive for Indian banks and for corporate customers. It’s going to be a win-win — one, in terms of us providing another product offering to our customers; and second, for the customers, it should reduce the cost of the transaction,” he said.