HDFC Bank Q2 Profit Rises 4.7% to ₹19,510 Crore; Deposits Up 18.8%

HDFC Bank, India’s largest private sector lender, reported a 4.7% year-on-year rise in net profit to ₹19,510 crore for the July–September quarter of FY27, as steady growth in lending income offset a steep fall in treasury gains. The bank announced its results on Saturday, October 17.

Net interest income (NII), the difference between interest earned on loans and interest paid on deposits, grew 9.7% to ₹34,620 crore. Net interest margin stood at 3.32% on interest-earning assets and 3.16% on total assets. Consolidated net profit came in at ₹20,700 crore, taking first-half consolidated profit to ₹39,940 crore. Net interest margin stood at 3.32% on interest-earning assets and 3.16% on total assets. Consolidated net profit came in at ₹20,700 crore, taking first-half consolidated profit to ₹39,940 crore.

Treasury drag on other income

It reduced by 3.6% year on year to stand at Rs 13,830 crore but was up by around 8% from the June quarter. Gains from treasury business came down to Rs 780 crore compared to Rs 2,390 crore last year. Fee and commission income increased to Rs 9,690 crore from Rs 8,840 crore.

Operating expenses rose to ₹18,970 crore from ₹17,980 crore, putting the cost-to-income ratio at 39.1%. Provisions and contingencies stood at ₹3,570 crore, translating into a total credit cost ratio of 0.44%.

Gross advances grew 16.3% to ₹32.2 lakh crore as of September 30, 2026. Loans to small and mid-market enterprises led the expansion with 23.5% growth, followed by corporate and other wholesale loans at 16.4% and retail loans at 11.7%. Average advances under management rose 14.1% year-on-year and 4.9% sequentially to ₹31.87 lakh crore.

Deposits grew faster than loans. Total deposits rose 18.8% to ₹33.27 lakh crore, led by a 22.8% jump in time deposits to ₹22.76 lakh crore. Current and savings account (CASA) deposits grew 10.8%, and their share of total deposits stood at 31.6%. The balance sheet expanded to ₹45.78 lakh crore from ₹40.03 lakh crore a year earlier.

Asset quality improves

The gross non-performing asset (NPA) ratio eased to 1.11% of gross advances from 1.17% in the June quarter and 1.24% a year ago. Excluding agricultural loans, the ratio was 0.87%. Net NPAs stood at 0.37% of net advances.

Managing Director and CEO Sashidhar Jagdishan described the bank’s top line as “extremely healthy”, according to Business Standard. He said the margin trajectory is expected to turn upward from the next quarter and pointed to asset quality as a key strength.

The results come during a leadership transition. Anup Bagchi, MD and CEO-designate, will succeed Jagdishan on October 27, 2026. In his opening remarks, Bagchi thanked Jagdishan for six years at the helm and said the lender’s post-merger transformation remained a work in progress.

Deputy Managing Director Kaizad Bharucha will leave the bank at the end of December 2026 after about three decades. Bagchi credited him with the bank’s strong credit quality.

The stock will react to the numbers when markets reopen on Monday. Investors are expected to watch whether margins recover in the December quarter as guided, and how the incoming management narrows the gap between time-deposit growth and the slower rise in low-cost CASA balances.