HDFC Bank Q2 Profit Up 4.7%; Treasury Gains Plunge 67%
HDFC Bank reports a 4.7% rise in Q2 net profit to Rs 19,510 crore, as a plunge in treasury gains offsets strong core lending growth.
HDFC Bank has reported a standalone net profit of Rs 19,510 crore for the July-September quarter of FY27, marking a 4.7 per cent increase year-on-year. While the bank saw robust growth in its core lending operations, the overall profit trajectory was dampened by a significant crash in treasury trading gains.
The Treasury Drag
The primary headwind for the private lender this quarter was the sharp decline in treasury trading gains, which plummeted by 67 per cent. These gains dropped to Rs 780 crore, compared to Rs 2,390 crore recorded in the same quarter last year.
The impact of this decline is evident when looking at the bank's operational performance. HDFC Bank noted that if treasury trading gains are excluded, the Profit After Tax (PAT) actually grew by approximately 12.6 per cent over the quarter ending September 30, 2025.
Core Banking Strength
Despite the treasury slump, the bank's core engine remains strong. Net interest income (NII)—the difference between the interest the bank earns from loans and the interest it pays on deposits—rose by 9.7 per cent, reaching Rs 34,620 crore from Rs 31,550 crore a year ago.
Other key financial metrics include:
- Net Revenue: Increased to Rs 48,450 crore, up from Rs 45,900 crore.
- Fee and Commission Income: Rose to Rs 9,690 crore from Rs 8,840 crore.
- Net Interest Margin: Stood at 3.16% on total assets and 3.32% based on interest-earning assets.
Asset Quality and Balance Sheet
One of the brightest spots in the Q2 report is the improvement in asset quality. The bank successfully brought down its Gross Non-Performing Assets (GNPA) to 1.11% of gross advances as of September 30, 2026. This is a notable improvement from 1.17% in the previous quarter and 1.24% a year earlier. Net NPAs were reported at 0.37 per cent.
Growth in Deposits and Advances
The bank continues to expand its footprint in both deposits and lending:
- Total Deposits: Grew by 18.8 per cent year-on-year, totaling Rs 33.27 lakh crore.
- Gross Advances: Increased by 16.3 per cent to reach Rs 32.20 lakh crore.
On the expenditure side, HDFC Bank reported operating expenses of Rs 18,970 crore, while provisions and contingencies amounted to Rs 3,570 crore for the quarter.