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Informist, Saturday, Jul. 18, 2026

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By Kabir Sharma

 

MUMBAI – Despite a sharp decline in provisions, HDFC Bank reported a mere 5% on-year rise in net profit for the June quarter as the bank's total income fell from the year-ago period. The massive drop in provisions helped the bank offset the impact of a fall in its core earnings. 

India's largest private sector lender reported a net profit of INR 190.60 billion for Apr-Jun, compared to INR 181.55 billion a year ago. The net profit missed analysts' estimate by over INR 2 billion. Provisions of the bank fell near 80% on year to INR 30.60 billion in the June quarter, the sharpest fall seen in at least 10 years.

The bank's total income fell over 7% to INR 921.84 billion in the June quarter. The decline in income was majorly on account of a steep fall in treasury income during the quarter. HDFC Bank's treasury reported an income of INR 24.07 billion in the June quarter, down 81% on year. This led to a 41?ll in other income at INR 128.22 billion.  

 

Interest income, the core income for the bank, remained muted in first quarter of the financial year. Interest earned rose just over 2% at INR 793.63 billion in Apr-Jun. 

 

Subdued growth in operating expenses and a slight fall in interest expended helped HDFC Bank keep total expenditure in check. The bank reported only 1% growth in total expenses at INR 640.16 billion in the June quarter. However, a sharp rise in the tax outgo ate into the bottomline. Tax expenses almost doubled on year to INR 60.49 billion in the June quarter.

 

Net interest income of the bank rose 7% on year to INR 335.3 billion in the reporting quarter. The net interest margin on total assets was 3.26%, down 12 basis points from 3.38% a quarter ago. 

 

Total deposits of the bank rose 14.7% to INR 31.71 trillion at the end of June. The growth in deposits continued to lag growth in advances despite an alarmingly high credit-deposit ratio of the bank. The current account savings account ratio of the bank was at 32.3% as on Jun. 30. 

 

Gross advances rose 15.4% on year to INR 30.61 trillion as on Jun. 30. Retail loans of the bank rose 7%, while small and medium enterprise loans and corporate loans grew 19% in the reporting period. 

 

In terms of asset quality, the gross non-performing asset ratio was 1.17%, 2 bps higher than in the previous quarter. The net NPA ratio also inched higher, rising to 0.41% from 0.38% a quarter ago. Credit cost of the bank rose to 40 bps in the June quarter from 35 bps a quarter ago. 

 

The bank's capital adequacy ratio was 19.57%, of which tier-I capital was at 17.4%. On Friday, shares of HDFC Bank ended at INR 819.60 on the National Stock Exchange, up 1.4% over Thursday.  End

 

Edited by Avishek Dutta

 

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