HDFC Bank, India's largest private sector lender, has reported a standalone net profit of ₹18,155 crore for the first quarter of the current financial year, marking a 12.2% increase compared to ₹16,175 crore in the same period last year. This growth is primarily attributed to a rise in interest income and a drop in tax expenses.
The bank's net interest income (NII), which represents the difference between interest earned on loans and interest expended on deposits, rose by 5% to ₹31,438 crore in the June quarter, compared to ₹29,837 crore in the corresponding period of the previous year. The total income for the quarter increased significantly to ₹99,200 crore. Interest income reached ₹77,470 crore, up 6% from ₹73,033 crore in the same quarter of the previous financial year. Specifically, earnings from advances grew by 2.5% to ₹60,193 crore. Interest from investments rose 20.1%, while income from balances with the RBI and interbank funds grew 41.7%.
However, the bank's net interest margin (NIM) narrowed to 3.35% during the first quarter, down from 3.46% in the corresponding period last year. This decrease reflects the lag in deposit repricing amid a high-interest rate environment.
Despite the positive profit growth, HDFC Bank's consolidated net profit witnessed a slight dip of 1.31% to ₹16,258 crore for the June 2025 quarter. Total expenditure also increased to ₹63,467 crore, compared to ₹59,817 crore in the same quarter of the previous fiscal year. Operating expenses for the quarter amounted to ₹17,430 crore, versus ₹16,620 crore in the corresponding period last year.
The bank's provisions and contingencies saw a massive surge, jumping 455% annually to ₹14,441.63 crore. This includes floating provisions of ₹9,000 crore and additional contingent provisions of ₹1,700 crore for the quarter. HDFC Bank stated that this increase in provisions is a proactive measure to enhance its floating provisions, acting as a countercyclical buffer to bolster the balance sheet's resilience.
The asset quality of the bank experienced a slight deterioration, with gross non-performing assets (NPA) rising to 1.40% of total advances, compared to 1.33% in the year-ago period. Net NPA also increased to 0.47% from 0.39% in the same period last year. In absolute terms, gross NPA jumped to ₹37,040.80 crore from ₹33,025.69 crore in the corresponding period last year.
In other news, HDFC Bank's board has approved a bonus issue of shares in the ratio of 1:1, meaning one bonus share for every share held, subject to shareholder approval. Additionally, the board has declared an interim dividend of ₹5 per equity share for the financial year 2025–26.
