Despite a Rs 9,128 crore gain from the HDB IPO, HDFC Bank’s Q1 consolidated profit drops to Rs 16,258 crore; provisions increase to Rs 14,442 crore.
HDFC Bank Reports Lower Q1 Profit as Provisions Climb, HDB IPO Adds ₹9,128 Cr
Despite a one-time pre-tax gain of Rs 9,128 crore from the IPO of its subsidiary, HDB Financial Services, hdfc bank share pricereported a drop in consolidated net profit to Rs 16,258 crore in Q1 FY26, down from Rs 16,475 crore in the same period last year, on July 19.
The bank made total provisions of Rs 14,442 crore, including Rs 9,000 crore in floating provisions and Rs 1,700 crore in contingent buffers, reflecting concern about possible asset quality pressure, which contributed to the muted bottom-line performance.
After its subsidiary HDB Financial Services became public, HDFC Bank’s ownership in the business fell from 94.32 percent at the end of the previous quarter to 74.19 percent as of June 30, 2025. In the first quarter of FY26, the bank’s standalone net interest income (NII) increased by 5.4% to Rs 31,438 crore.
As a result of deposits repricing more quickly than assets, the quarter’s core net interest margin (NIM) decreased from 3.46 percent in Q4 FY25 to 3.35 percent.
Operating costs increased from Rs 16,621 crore in Q1 FY25 to Rs 17,434 crore in Q1 FY26, a 4.9 percent year-over-year increase. This comprises other expenses of Rs 11,276 crore and personnel costs of Rs 6,158 crore.
With profits from the HDB Financial IPO excluded, the cost-to-income ratio was 39.6%.
In the first quarter of FY25, the total standalone income increased from Rs 83,701 crore to Rs 99,200 crore.
As of June 30, 2025, total deposits increased 16.2% to Rs 27.64 lakh crore, while gross advances increased 6.7% to Rs 26.53 lakh crore.
With savings account deposits of Rs 6.39 lakh crore and current account deposits of Rs 2.98 lakh crore, the CASA ratio was 33.9 percent, down from 38.2 percent in Q1 FY25. Compared to the same quarter previous year, the capital adequacy ratio (CAR) increased to 19.88 percent from 19.33 percent. Consolidated total income increased from Rs 1.17 lakh crore to Rs 1.33 lakh crore in the previous year.
Profits from the HDB IPO saw other income soar to Rs 21,730 crore. This comprised Rs 101.1 crore from trading and mark-to-market profits, Rs 16.3 crore from currency and derivatives, and Rs 75.9 crore from fees and charges.
Before taxes, insurance subsidiaries had a profit of Rs 1,645 crore.
As of June 30, the net non-performing asset (NPA) ratio was 0.47 percent and the gross non-performing asset (GNPA) ratio was 1.40 percent, both of which were marginally higher than they were a year earlier. At 0.48 percent, the return on assets remained consistent.
The first quarter of FY26 had a return on assets of 0.48 percent, which was the same as the same time last year. In terms of operations, operating profit was Rs 35,734 crore, while provisions—which included Rs 1,700 crore in contingent provisions and Rs 9,000 crore in floating provisions—rose to Rs 14,442 crore.
The board of HDFC Bank also authorized a 1:1 bonus issue and a special interim dividend of Rs 5 per share. Shareholders whose names are on the register as of July 25 will receive the special interim dividend, which is expected to be distributed on August 11.
