HDFC Bank Q2 profit rises on back of stronger loan income
HDFC Bank, India's large private lender that earns mainly from interest on loans, reported unaudited results for the quarter ended September 30, 2026. Standalone profit after tax was ₹19,509.96 crore and consolidated profit was ₹20,700.03 crore, both higher than a year ago . The takeaway is that net interest income rose while lower treasury gains weighed on standalone other income, and group businesses added to profit.
Net interest income rose while other income diverged
Net interest income, the difference between interest earned and interest paid, increased during the quarter. Provisions, or money set aside for possible loan losses, stayed contained on both bases .
Source: .
| Standalone, ₹ crore unless noted | Q2 FY27 | Q1 FY27 | Q2 FY26 |
|---|---|---|---|
| Total income | 97,257.62 | 92,184.38 | 91,040.72 |
| Net interest income | 34,619.18 | 33,533.95 | 31,551.50 |
| Other income | 13,831.02 | 12,821.60 | 14,350.02 |
| Provisions | 3,573.62 | 3,059.76 | 3,500.53 |
| Profit after tax (PAT) | 19,509.96 | 19,059.72 | 18,641.28 |
| Net margin, % | 20.1 | 20.7 | 20.5 |
Source: .
| Consolidated, ₹ crore unless noted | Q2 FY27 | Q1 FY27 | Q2 FY26 |
|---|---|---|---|
| Total income | 1,29,358.69 | 1,33,110.36 | 1,18,560.63 |
| Net interest income | 44,464.20 | 42,949.70 | 40,252.98 |
| Other income | 34,227.06 | 42,535.03 | 31,566.79 |
| Provisions | 4,209.00 | 3,802.84 | 4,281.83 |
| Profit after tax (PAT), after minority interest | 20,700.03 | 19,244.71 | 19,610.67 |
| Net margin, % | 16.0 | 14.5 | 16.5 |
Net interest income grew year on year and sequentially on both bases, supporting profit growth even though total income moved differently at the bank and the group . Consolidated PAT is shown after minority interest in all three quarters; net margin is PAT divided by total income .
Other income, which includes fees, commissions and treasury gains, fell from a year ago at the bank alone but rose at the group level . Standalone fees and commissions increased year on year, while treasury trading gains declined . That divergence points to insurance and other subsidiaries supporting the consolidated top line.
The consolidated result deducted ₹837.06 crore of minority interest; neither the standalone nor consolidated results reported an exceptional item . For the half-year ended September 30, 2026, standalone PAT was ₹38,569.68 crore and consolidated PAT was ₹39,944.74 crore . The board approved the results on October 17, 2026 .
Customer loans drove profit while insurance added mostly revenue
Retail and wholesale banking contributed about three-fourths of consolidated profit before tax and minority interest. Insurance brought large revenue but much smaller profit after expenses .
Source: .
| Consolidated Q2 FY27, ₹ crore | Revenue | Profit before tax |
|---|---|---|
| Retail Banking | 79,112.16 | 10,521.59 |
| Wholesale Banking | 52,743.87 | 10,563.24 |
| Treasury | 19,150.30 | 2,099.17 |
| Other Banking Operations | 9,700.20 | 3,297.50 |
| Insurance Business | 26,820.21 | 2,005.59 |
| Others | 5,280.86 | 747.15 |
Retail and wholesale together contributed about three-fourths of consolidated profit before tax and minority interest, making customer banking the main contributor .
Treasury reported revenue of ₹19,150.30 crore and profit before tax of ₹2,099.17 crore . Claims, benefits paid and other insurance expenses totalled ₹22,518.74 crore in the quarter . An unallocated loss of ₹571.70 crore reduces the six segment profits to ₹28,662.54 crore before tax and minority interest. Tax of ₹7,125.45 crore and minority interest of ₹837.06 crore then reduce profit to ₹20,700.03 crore .
Deposits grew faster than loans and bad-loan ratios eased
The balance sheet expanded at a mid-teens pace from a year ago, with deposits growing slightly faster than loans. Asset quality improved as a share of the larger book .
Source: .
| Standalone as of Sept 30, ₹ crore unless noted | 2026 | 2025 |
|---|---|---|
| Advances | 31,95,566.06 | 27,46,359.78 |
| Deposits | 33,27,448.93 | 28,01,788.77 |
| Gross bad-loan ratio, % | 1.11 | 1.24 |
| Net bad-loan ratio, % | 0.37 | 0.42 |
| Total capital adequacy ratio (CAR), % | 18.87 | 19.96 |
Faster deposit growth helps fund future lending without leaning as much on borrowings . On a consolidated basis, advances were ₹33,16,057.54 crore and deposits were ₹33,24,146.36 crore as of September 30, 2026 .
The total capital adequacy ratio, a capital cushion against shocks, remained near 19% on a standalone basis. CET-1, a narrower capital measure, was 17.1% at September 30, 2026 .
Management had flagged faster lending and slow margin repair
The September outcome fits what management described in July as being on the verge of pressing the pedal on advances after three to four quarters of building momentum .
- Corporate and wholesale advances grew about 18% year on year in the June quarter, continuing the prior-quarter pace .
- MSME business banking, the largest part of MSME, grew 22.3% and topped the March quarter despite June usually being softer .
- Disbursements under ECLGS 5.0 were close to ₹14,000 crore as of June 30, 2026, seen among the highest among participating banks .
- Mortgage disbursements grew close to 14% year on year, with wheels and unsecured disbursements up about 20% odd, though card and personal-loan books were slower to catch up .
On margins, management called cost of funds the biggest opportunity, with 40 to 50 basis points of possible improvement against history and industry, but said it would not change in a hurry . Sequential cost was almost flat in the June quarter and down about 40 basis points year on year, with retail deposit costs steady but non-retail costs elevated and borrowing mix still about 11% against an industry 5% to 6% .
The longer plan is to lift the retail share of loans from 52% toward about 60% to mirror consumption in the economy, deepen granular deposits from more than 10 crore customers, and harvest branch and technology investments for efficiency over two to three years . For the year ended March 2026, management had already framed the same trade, with loan growth of 12% up from 5.5%, deposit growth of 14.4%, return on assets steady at 1.9% as core cost-to-income fell and credit costs stayed low .
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Sources
- 1 Financial results: Consolidated-Sep-Qtr-2026, Standalone-Sep-Qtr-2026
- 2 Board Meeting Outcome for Approval Of Unaudited Standalone And Consolidated Financial Results Of The Bank For The Quarter And Half-Year Ended September 30, 2026
- 3 Earnings-call transcript, 2026-07-24
- 4 Earnings-call transcript, Apr 2026