HDFC Bank Q1 FY26 Net Profit Falls to ₹16,258 Cr Amid Elevated Provisions Despite Windfall from HDB IPO
HDFC Bank reported a dip in consolidated net profit to ₹16,258 crore for the quarter ended June 30, 2025 (Q1 FY26), down from ₹16,475 crore in the same quarter last year. This came despite a significant one-time pre-tax gain of ₹9,128 crore from the initial public offering (IPO) of its subsidiary, HDB Financial Services.
The subdued earnings were primarily due to total provisions surging to ₹14,442 crore, including ₹9,000 crore in floating provisions and ₹1,700 crore in contingent buffers—highlighting the bank’s cautious stance on asset quality.
📊 Financial Highlights:
- Standalone Net Interest Income (NII): ₹31,438 crore, up 5.4% YoY
- Core Net Interest Margin (NIM): 3.35% (vs 3.46% in Q4 FY25)
- Standalone Total Income: ₹99,200 crore (vs ₹83,701 crore YoY)
- Operating Profit: ₹35,734 crore
- Operating Expenses: ₹17,434 crore (+4.9% YoY)
- Cost-to-Income Ratio (ex-HDB IPO gains): 39.6%
📈 Asset & Deposit Metrics:
- Gross Advances: ₹26.53 lakh crore (+6.7% YoY)
- Total Deposits: ₹27.64 lakh crore (+16.2% YoY)
- CASA Ratio: 33.9% (vs 38.2% YoY)
- Gross NPA Ratio: 1.40%
- Net NPA Ratio: 0.47%
- Return on Assets (RoA): 0.48%
Following the HDB IPO, HDFC Bank’s stake in the subsidiary dropped to 74.19% from 94.32% in the previous quarter.
💼 Other Income & Subsidiary Performance:
- Other Income: ₹21,730 crore (includes IPO gain)
- Fees & Commissions: ₹75.9 crore
- Forex & Derivatives: ₹16.3 crore
- Trading & MTM Gains: ₹101.1 crore
- Insurance Subsidiaries PBT: ₹1,645 crore
💸 Shareholder Updates:
The bank’s board approved a special interim dividend of ₹5 per share, payable on August 11 to shareholders on record as of July 25. Additionally, a 1:1 bonus issue was announced, with the record date set for August 27, pending shareholder and regulatory approvals.
📉 Market Reaction:
Ahead of the earnings announcement, HDFC Bank shares closed 1.56% lower at ₹1,959 on NSE. Analysts had expected net profit to rise 7.4% YoY to ₹17,385 crore and NII to touch ₹31,885 crore, according to a Moneycontrol poll.
