HDFC Bank, India's largest private sector lender, reported a net profit of ₹19,510 crore for the second quarter of the financial year 2026, marking a 5% increase compared to ₹18,641 crore in the same period last year. The bank's net interest income (NII), which is the difference between interest earned on loans and interest paid on deposits, rose by 10% to ₹34,619 crore.
- Net profit increased by 5% to ₹19,510 crore in Q2 2026.
- Net interest income grew 10% to ₹34,619 crore.
- Net interest margin was 3.16% on total assets.
- Gross non-performing assets (NPA) improved to 1.11% of total advances.
- Gross advances rose 16.3% to ₹32,19,500 crore.
- CASA deposits increased by 10.7% to ₹9,71,200 crore.
- Bank operates 9,706 branches and 20,881 ATMs across 4,177 cities.
What contributed to HDFC Bank's profit growth in Q2 2026?
The primary factor behind HDFC Bank's profit growth was the 10% increase in net interest income, which rose to ₹34,619 crore. This increase reflects higher interest earned on loans compared to interest paid on deposits. The bank's net interest margin (NIM), which measures the profitability of its lending activities, stood at 3.16% on total assets and 3.32% based on interest-earning assets.
How did HDFC Bank's asset quality perform?
HDFC Bank showed improvement in asset quality during the quarter. The gross non-performing assets (NPAs) as a percentage of total advances decreased to 1.11% in September 2026 from 1.24% a year earlier. In absolute terms, gross NPAs were ₹35,810 crore, slightly higher than ₹34,289 crore in the previous year. The bank set aside ₹3,570 crore for provisions and contingencies, with a credit cost ratio of 0.44% for the quarter.
What was the growth in HDFC Bank's advances and deposits?
The bank's gross advances increased by 16.3% to ₹32,19,500 crore compared to the same quarter last year. Advances under management grew by 15.3%, with retail loans rising 11.7%, small and mid-market enterprise loans increasing 23.5%, and corporate and wholesale loans up 16.4%. Overseas advances made up 3.3% of total advances.
On the deposits side, the bank's average CASA (current and savings account) deposits grew 10.7% to ₹9,71,200 crore compared to ₹8,77,000 crore in September 2025. This also represented a 1.5% increase over the previous quarter.
How extensive is HDFC Bank's branch and ATM network?
As of the end of September 2026, HDFC Bank operated 9,706 branches and 20,881 ATMs across 4,177 cities, up from 9,545 branches and 21,417 ATMs in 4,156 cities a year earlier. Half of the branches are located in semi-urban and rural areas. The bank also has 14,365 business correspondents, mainly operated by common service centres (CSCs). The total number of employees stood at 2,10,109.
What was the market reaction to HDFC Bank's Q2 earnings?
HDFC Bank's shares ended 0.28% higher at ₹728.85 on the day before the earnings announcement, reflecting steady investor confidence in the bank's performance.
Frequently Asked Questions
Q: What is net interest income (NII)?
A: Net interest income is the difference between the interest a bank earns on its loans and the interest it pays on deposits.
Q: What does net interest margin (NIM) indicate?
A: Net interest margin measures the profitability of a bank’s lending activities relative to its interest-earning assets.
Q: What are non-performing assets (NPAs)?
A: NPAs are loans or advances on which the borrower is not making interest payments or repaying principal as scheduled.
Q: How significant is CASA growth for a bank?
A: Growth in CASA deposits is important because these deposits are low-cost funds that help improve a bank’s profitability.
