HDFC Bank Q3 Results: Net Profit Rises 11% YoY to Rs 18,654 Crore, NII Grows 6.4%
HDFC Bank delivered a steady financial performance in the December quarter of FY26, reporting an 11% year-on-year increase in net profit that exceeded market expectations. India’s largest private sector lender continued to show resilience in earnings despite margin pressures and a moderated growth environment.
Profit Performance Beats Estimates
The bank’s standalone profit after tax (PAT) stood at Rs 18,654 crore for the quarter ended December 31, 2025, compared with Rs 16,735 crore in the same period last year. This was higher than Street expectations of around Rs 18,473 crore.
On a sequential basis, profit remained largely flat compared to Rs 18,641 crore reported in the September 2025 quarter, reflecting stable operating performance.
Net Interest Income and Margins
HDFC Bank’s net interest income (NII) increased by 6.4% year-on-year to Rs 32,620 crore, up from Rs 30,650 crore in the corresponding quarter of the previous year.
During the quarter:
- Interest income rose marginally by 1% YoY to Rs 76,751 crore.
- Interest expenses declined nearly 3% YoY to Rs 44,136 crore.
The core net interest margin (NIM) stood at 3.35% on total assets and 3.51% on interest-earning assets, indicating stable margins despite competitive pressures.
Operating Efficiency
Operating expenses for Q3FY26 were reported at Rs 18,770 crore. Excluding the estimated Rs 800 crore impact from employee benefits under the New Labour Code, expenses were Rs 17,970 crore, compared with Rs 17,110 crore in the year-ago quarter.
The core cost-to-income ratio for the quarter stood at 39.2%, reflecting disciplined cost management amid network expansion.
Balance Sheet and Deposit Growth
The bank’s balance sheet continued to expand steadily. As of December 31, 2025, total balance sheet size stood at Rs 40.89 lakh crore, compared with Rs 37.59 lakh crore a year earlier.
Key balance sheet highlights include:
- Average deposits rose 12.2% YoY to Rs 27.52 lakh crore.
- Average CASA deposits grew 9.9% YoY to Rs 8.98 lakh crore.
- Sequential growth in deposits remained healthy during the quarter.
Advances and Loan Mix
Gross advances increased by 11.9% year-on-year to Rs 28.45 lakh crore. Growth was driven primarily by:
- Retail loans rising 6.9%
- Small and mid-market enterprise loans growing 17.2%
- Corporate and wholesale loans expanding 10.3%
Overseas advances accounted for a modest 1.7% of total advances, keeping the loan book largely domestically focused.
Asset Quality Remains Stable
Asset quality indicators remained steady during the quarter. Gross non-performing assets (GNPA) stood at 1.24% of gross advances as of December 31, 2025, unchanged sequentially and improved from 1.42% a year ago.
Net NPAs were reported at 0.42%, reflecting controlled credit costs and prudent risk management.
Expanding Network and Workforce
As of December 31, 2025, HDFC Bank operated 9,616 branches and 21,176 ATMs across 4,170 cities and towns. Around 50% of branches are located in semi-urban and rural areas, supporting financial inclusion.
The bank’s workforce stood at 2,15,739 employees, underscoring continued investment in human capital to support long-term growth.
Disclaimer: The views and investment tips expressed in this article are for informational purposes only and do not represent financial advice. The views expressed are those of the sources cited and not necessarily those of this website or its management. Investing in equities or other financial instruments carries the risk of financial loss. Readers must exercise due caution and conduct their own research before making any investment decisions. We are not liable for any losses incurred as a result of decisions made based on this article. Please consult a qualified financial advisor before making any investment.
