HDFC Bank Q3 net profit rises 11.5% YoY

Despite some pressure on margins, HDFC Bank announced an 11.5 percent year-over-year increase in standalone net profit for the fiscal third quarter on Saturday. This increase was bolstered by consistent growth in core earnings, good deposit accretion, and stable asset quality. 

For the quarter ending December 31, 2025, the nation's biggest private sector lender reported a profit after tax of Rs 18,654 crore, up from Rs 16,736 crore during the same period the previous year. The core income parameter of HDFC Bank, net interest income (NII), rose 6.4% to Rs 32,620 crore in Q3 FY26 from Rs 30,650 crore in the same quarter last year. During the quarter, the core net interest margin was 3.51 percent on interest-earning assets and 3.35 percent on total assets.

Throughout the period, asset quality did not change. As of December 31, 2025, gross non-performing assets (GNPA) was Rs 35,179 crore, up from Rs 36,019 crore the previous year. 

From 1.42 percent during the same time last year, the gross non-performing asset (NPA) ratio decreased to 1.24 percent. The net NPA ratio decreased to 0.42 percent from 0.46 percent, while net NPAs fell to Rs 11,982 crore from Rs 11,588 crore in the previous year.

The quarter's operating costs came to Rs 18,770 crore. Operating costs were Rs 17,970 crore, up from Rs 17,110 crore during the same period last year, excluding a projected Rs 800 crore impact from employee benefits under the New Labour Code. During the quarter, the bank's core cost-to-income ratio was 39.2%. 

For the quarter, provisions and contingencies were Rs 2,840 crore, a decrease of more than 10% from the same period last year. The release of Rs 1,040 crore in contingent provisions, which were mostly connected to a sizable borrower group fulfilling certain requirements, assisted with this. The December quarter's overall credit cost ratio, excluding this release, was 0.55 percent.

On the balance sheet, HDFC Bank’s total size expanded to Rs 40.89 lakh crore as of December 31, 2025, compared with Rs 37.59 lakh crore a year earlier. End-of-period deposits stood at Rs 28.6 lakh crore, up 11.6 percent from a year earlier. CASA deposits increased 10.1 percent to Rs 9.61 lakh crore, comprising 33.6 percent of total deposits. Time deposits grew 12.3 percent year-on-year to Rs 18.99 lakh crore.

Gross advances as of December 31, 2025 were Rs 28.45 lakh crore, reflecting an 11.9 percent year-on-year increase. Advances under management grew 9.8 percent over the previous year, with retail loans rising 6.9 percent, small and mid-market enterprise loans growing 17.2 percent, and corporate and other wholesale loans increasing 10.3 percent. Overseas advances accounted for 1.7 percent of total advances.

The bank’s capital position remained strong, with the total capital adequacy ratio at 19.9 percent under Basel III norms, well above the regulatory requirement of 11.9 percent. Tier-1 capital adequacy stood at 17.8 percent, while the common equity Tier-1 ratio was 17.4 percent.