MUMBAI: The largest private sector lender, HDFC Bank, has reported a healthy set of numbers for the March quarter, with a 9.1% year-on-year growth in standalone net income at Rs 19,122 crore. For the full year, profit grew 10.9% to Rs 74,670 crore.
The key operational metric, net interest income, grew at a tepid 3.2% to Rs 33,080 crore in the March quarter. However, a drop in provisions and robust fee income, including higher treasury gains despite a marginal hit due to the Reserve Bank-ordered forex unwinding, supported earnings. The bank did not disclose the quantum of the forex hit. Total revenue grew 5% to Rs 46,280 crore for the quarter.
Key profitability metric net interest margin stood at 3.38% on total assets for the quarter and at 3.53% for the full year based on interest-earning assets. Asset quality improved, with gross non-performing assets (GNPA) declining to 1.15% from 1.33%, while net non-performing assets fell to 0.33% from 0.38%. Provisions and contingencies for the quarter stood at Rs 2,610 crore, while the total credit cost ratio was 0.35.
Other income rose to Rs 13,200 crore, of which fees and commissions contributed Rs 9,220 crore, up from Rs 8,530 crore. Gains from foreign exchange and derivatives stood at Rs 1,490 crore, up from Rs 1,440 crore, while net trading and mark-to-market gains rose to Rs 820 crore from Rs 390 crore. Miscellaneous income, including recoveries and dividends, stood flat at Rs 1,670 crore, the bank said during the concall on Saturday.
Expenses rose to Rs 18,480 crore from Rs 17,560 crore, while the cost-to-income ratio stood at 39.9.
The balance sheet expanded to Rs 43.65 lakh crore from Rs 39.10 lakh crore in March 2025, while total business rose to Rs 60.7 lakh crore. Of this, deposits stood at Rs 31.05 lakh crore, up 10% year-on-year, while advances were Rs 29.64 lakh crore, an increase of 12% year-on-year. Average CASA deposits stood at Rs 9.18 lakh crore, up 10.8% year-on-year and 2.2% over the December quarter. CASA deposits comprised 34.1% of total deposits.
Speaking on the issue of AT1 bond mis-selling, chief executive Sashidhar Jagdishan, attending an earnings call for the first time since taking over five years ago, said the matter is under probe, but claimed the complainants were not uninformed investors and were individuals seeking higher returns.
On the three legal firms probing the resignation of former chairman Atanu Chakraborty, Jagdishan said that given the volume of data, the review was still in progress and would take time, though neither too long nor too short.
On whether he would seek a third term as CEO, deputy CEO Kaizad M Bharucha said, “The nomination and remuneration committee and the board are seized of the matter and will take it up in due course.”
On whether the bank would seek chairman Keki Mistry to continue beyond the initially announced three months, both executives said, “We want him to be guiding us for a longer term, but the board will take the final call.”
On the impact of the Iran war on the bank and its clients, chief financial officer Srinivasan Vaidyanathan said there was an impact, but nothing material so far. He added that it was difficult to assess the full impact without clarity on the duration of the conflict, and there was no visible stress at present.
The bank declared a final dividend of Rs 13 per share for FY26, with the record date set for June 19. In addition, the board approved a special interim dividend of Rs 2.5 per share.
The bank also said it will make changes to its employee stock option plans, originally adopted in April 2022, expanding the powers of the governance, nomination and remuneration committee with regard to restricted stock units. These are a form of equity compensation under which employers promise shares to employees, subject to vesting conditions such as performance goals and length of service.