HDFC Bank Q2 profit rises 4.7%

HDFC Bank (HDB) posted a standalone net profit of ₹19,510 crore for the quarter ended September 30, 2026, representing year-on-year growth of about 4.7%. The profit outcome was close to market expectations, with one analyst estimate cited at roughly ₹19,526 crore, implying a narrow shortfall. Some coverage characterised the results as broadly in line with forecasts, while others highlighted the marginal miss versus this estimate.

The quarter’s performance was driven by higher core lending income and supported by improving asset quality and strong deposit mobilisation. These positives were partly offset by weaker treasury trading income and the impact of provisions and contingencies booked in the period.

Net interest income for the quarter rose about 9.7% year-on-year to roughly ₹34,619–34,620 crore, underscoring growth in the bank’s core lending operations. This expansion in NII reflects the contribution from interest-earning assets and the broader loan book during the period.

In contrast, treasury trading income declined sharply year-on-year to approximately ₹780 crore, a drop of around 67% versus the same quarter a year earlier. The steep fall in treasury gains limited the overall profit growth despite stronger core income, and contributed to the slight undershoot relative to at least one analyst profit estimate.

Asset quality showed an improvement, with gross non-performing assets at about 1.11% of gross advances as of September 30, 2026. This lower GNPA ratio indicates a healthier loan book compared with the prior year period, even as the bank continued to grow its advances.

Provisions and contingencies for the quarter were reported in the range of roughly ₹3,570–3,574 crore. These provisions, while absorbing part of the operating profits, were taken alongside the improvement in headline asset quality ratios, suggesting continued prudence in risk coverage.

Total deposits grew about 18.8% year-on-year in Q2 FY27, with reported aggregates around ₹33.27 lakh crore. This strong deposit mobilisation reflects continued franchise strength and provides a funding base for future lending and income growth.

The combination of robust deposit growth, higher net interest income and improved asset quality underpinned the bank’s quarterly performance. At the same time, the sharp fall in treasury income and the level of provisions tempered the translation of operating strength into bottom-line profit growth.