HDFC Bank Posts Q2 Net Profit of ₹19,510 Crore as Slumping Treasury Income Offsets Credit Growth

India's largest private-sector lender, HDFC Bank, reported its second-quarter financial results for the quarter ended September 30, posting a standalone net profit of ₹19,510 crore (₹195.10 billion). The bottom-line figure marks a 4.7% increase compared to ₹18,641 crore recorded in the year-earlier period.

However, the earnings narrowly missed market expectations, with analyst consensus compiled by LSEG forecasting a net profit of ₹19,526 crore. The modest profit expansion was largely attributed to a steep contraction in treasury gains, which eclipsed double-digit balance sheet expansion.

Key Earnings Highlights

• Net Profit: Rose 4.7% year-on-year to ₹19,510 crore from ₹18,641 crore.
• Net Interest Income (NII): Expanded 9.7% year-on-year to ₹34,619 crore.
• Other Income: Declined 3.6% year-on-year to ₹13,831 crore.
• Treasury Trading Gains: Slumped to ₹780 crore from ₹2,390 crore in the same period last year.
• Gross Advances: Expanded 16.3% year-on-year across retail and corporate segments.
• Deposits: Grew 18.8% year-on-year.
• Credit-to-Deposit (C/D) Ratio: Stood at 96.0% at the end of the quarter.

Treasury Drag and Non-Interest Income

The bank's other income line fell 3.6% year-on-year to ₹13,831 crore, primarily dragged down by treasury trading profits that tumbled to ₹780 crore from ₹2,390 crore in the corresponding quarter of the previous fiscal year.

Core non-interest operational streams remained resilient: fees and commissions increased to ₹9,690 crore from ₹8,840 crore, while foreign exchange and derivative revenues softened marginally to ₹1,550 crore from ₹1,590 crore.

Balance Sheet Growth and Asset Quality

HDFC Bank sustained healthy credit growth in line with broader trends across Indian commercial banks. Gross advances grew 16.3% year-on-year, supported by broad-based corporate and retail demand. Total deposits rose by 18.8%, helping the bank maintain its credit-to-deposit ratio at 96.0%.

Asset quality indicators improved over the preceding quarter:

• The gross non-performing asset (GNPA) ratio improved to 1.11% as of September 30, down from 1.17% at the end of June.
• Provisions for potential bad loans and contingencies rose 2.1% year-on-year to ₹3,574 crore (₹35.74 billion), compared to the previous year.

Leadership Transition

The quarterly performance arrives ahead of a pivotal management change at the Mumbai-based lender. Anup Bagchi, a veteran of the ICICI group, will take charge as Managing Director and Chief Executive Officer for a three-year tenure effective October 27.

Bagchi becomes HDFC Bank's first external chief executive, stepping into the role amid continued investor focus on the bank's operational profitability, post-merger integration milestones, and credit-to-deposit balancing.

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