HDFC Bank Q3 net profit rises 11.5% YoY to Rs 18,654 crore; asset quality stable, loans grow in double digits

HDFC Bank

• HDFC Bank Q3 net profit rose 11.5 percent YoY to Rs 18,654 crore.
• Net interest income rose 6.4% to Rs 32,620 crore; asset quality stayed stable.
• Gross NPA ratio improved to 1.24 percent from 1.42 percent last year.

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HDFC Bank on Saturday reported an 11.5 percent year-on-year rise in standalone net profit for the fiscal third quarter, supported by steady growth in core earnings, healthy deposit accretion and stable asset quality, even as margins remained under some pressure. The country’s largest private sector lender posted a profit after tax of Rs 18,654 crore for the quarter ended December 31, 2025, compared with Rs 16,736 crore in the corresponding period last year.

HDFC Bank's Q3 FY26 net interest income (NII), the bank’s core income metric, increased 6.4 percent to Rs 32,620 crore from Rs 30,650 crore in the year-ago quarter. Core net interest margin stood at 3.35 percent on total assets and 3.51 percent on interest-earning assets during the quarter.

Ahead of the quarterly results, HDFC Bank shares rose 0.55 percent to end at Rs 930.55 on the NSE. The stock has gained 13.7 percent in the last one year, outperforming benchmark Nifty 50, which has returned less than 11 percent during the same period.

Asset quality remained stable during the quarter. Gross non-performing assets (GNPA) stood at Rs 35,179 crore as of December 31, 2025, compared with Rs 36,019 crore a year earlier. The gross NPA ratio improved to 1.24 percent from 1.42 percent in the same period last year.

Net NPAs declined to Rs 11,982 crore from Rs 11,588 crore a year ago, with the net NPA ratio easing to 0.42 percent from 0.46 percent.

Operating expenses for the quarter were Rs 18,770 crore. Excluding an estimated Rs 800 crore impact from employee benefits under the New Labour Code, operating costs stood at Rs 17,970 crore, compared with Rs 17,110 crore in the year-ago period. The bank’s core cost-to-income ratio was 39.2 percent during the quarter.

Provisions and contingencies amounted to Rs 2,840 crore for the quarter, shrinking over 10 percent from a year ago. This was helped by the release of contingent provisions of Rs 1,040 crore, primarily related to a large borrower group meeting specific conditions. Excluding this release, the total credit cost ratio was 0.55 percent for the December quarter.

On the balance sheet, HDFC Bank’s total size expanded to Rs 40.89 lakh crore as of December 31, 2025, compared with Rs 37.59 lakh crore a year earlier. End-of-period deposits stood at Rs 28.6 lakh crore, up 11.6 percent from a year earlier. CASA deposits increased 10.1 percent to Rs 9.61 lakh crore, comprising 33.6 percent of total deposits. Time deposits grew 12.3 percent year-on-year to Rs 18.99 lakh crore.

Gross advances as of December 31, 2025 were Rs 28.45 lakh crore, reflecting an 11.9 percent year-on-year increase. Advances under management grew 9.8 percent over the previous year, with retail loans rising 6.9 percent, small and mid-market enterprise loans growing 17.2 percent, and corporate and other wholesale loans increasing 10.3 percent. Overseas advances accounted for 1.7 percent of total advances.

The bank’s capital position remained strong, with the total capital adequacy ratio at 19.9 percent under Basel III norms, well above the regulatory requirement of 11.9 percent. Tier-1 capital adequacy stood at 17.8 percent, while the common equity Tier-1 ratio was 17.4 percent.

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