HDFC Bank Q3 FY26 Results Show Profitability Growth, Strong Asset Quality and Deposit Expansion

HDFC Bank Limited reported steady growth in profitability and assets for the quarter and nine months ended December 31, 2025. The results, approved at a meeting in Mumbai on January 17, 2026, highlight higher earnings, stable margins, firm asset quality and continued expansion in deposits, loans and branch presence.

Asset quality metrics stayed strong during the December 2025 quarter. Gross non-performing assets were 1.24% of gross advances, unchanged from September 30, 2025, and lower than 1.42% on December 31, 2024. Net non-performing assets were contained at 0.42% of net advances, reflecting disciplined recovery and provisioning practices.

Profitability stayed high through the quarter, supported by broad-based income and cost discipline. Profit before tax stood at Rs 24,260 crore and profit after tax at Rs 18,650 crore. Both together implied an 11.5% year-on-year rise, driven by steady net interest income, stronger fee income and tight operating and credit cost management.

Net interest income, defined as interest earned minus interest paid, rose 6.4% year-on-year. It reached Rs 32,620 crore in the December 2025 quarter, compared with Rs 30,650 crore a year earlier. Net revenue increased 8.9% to Rs 45,870 crore from Rs 42,110 crore, indicating healthy growth in core banking activity and spread income.

Other income, or non-interest revenue, totalled Rs 13,250 crore for the quarter. Fees and commissions contributed Rs 9,230 crore, higher than Rs 8,180 crore in the December 2024 quarter. Foreign exchange and derivatives revenue was Rs 1,430 crore, slightly above Rs 1,400 crore in the corresponding quarter of the previous financial year.

The bank’s net interest margin on total assets remained at 3.35%. On interest-earning assets, the margin was 3.51%. These readings, despite market and rate conditions, point to consistent balance sheet efficiency and a funding mix supported by low-cost deposits, including current and savings accounts.

Key metric	Q3 FY26	Q3 FY25	Year-on-year change
Net interest income (Rs crore)	32,620	30,650	+6.4%
Net revenue (Rs crore)	45,870	42,110	+8.9%
PBT (Rs crore)	24,260	–	+11.5% vs prior year
PAT (Rs crore)	18,650	–	+11.5% vs prior year
Core NIM on total assets	3.35%	–	Stable
GNPA ratio	1.24%	1.42%	Improved
NNPA ratio	0.42%	–	Controlled

The balance sheet continued to expand during the year. Total assets grew to Rs 40,89,000 crore as of December 31, 2025, compared with Rs 37,59,000 crore a year earlier. The rise reflects ongoing expansion in lending and investments alongside steady liability mobilisation across customer segments and geographies.

Average advances under management for the quarter, grossed up for interbank participation certificates, bills rediscounted and securitisation or assignment, reached Rs 28,64,100 crore. This represented a 2.5% sequential increase over Rs 27,94,600 crore in the September 2025 quarter and a 9.0% year-on-year rise from Rs 26,27,600 crore.

Average deposits for the December 2025 quarter were Rs 27,52,400 crore. This marked a 1.5% increase over Rs 27,10,500 crore in the September 2025 quarter and a 12.2% rise from Rs 24,52,800 crore in the December 2024 quarter. The growth highlights sustained customer franchise strength across retail, corporate and government segments.

Within average deposits, low-cost current and savings balances continued to build. Average CASA deposits during the quarter were Rs 8,98,400 crore, up 9.9% year-on-year from Rs 8,17,600 crore. Sequentially, they grew 2.4% from Rs 8,77,000 crore in the September 2025 quarter, supporting margin stability and funding cost management.

End-of-period deposits as on December 31, 2025 stood at Rs 28,60,100 crore, an 11.6% increase over December 31, 2024. End-of-period CASA deposits grew 10.1% year-on-year. Savings account balances were Rs 6,61,700 crore and current account balances were Rs 2,99,500 crore, reflecting healthy inflows into both categories.

Time deposits also grew at a steady pace. They reached Rs 18,98,900 crore in Q3 FY26, showing a 12.3% year-on-year increase. CASA deposits formed 33.6% of total deposits, indicating a sizeable low-cost funding base that supports lending growth and helps maintain net interest margins over the credit cycle.

HDFC Bank results: costs, risk and branch network

Operating costs for the quarter were Rs 18,770 crore. When adjusting for an estimated Rs 800 crore related to employee benefits under the New Labour Code, core operating expenses were Rs 17,970 crore. These compared with Rs 17,110 crore in the same quarter last year, reflecting investments in growth and distribution.

The bank sustained firm cost control despite this expansion. The core cost-to-income ratio stood at 39.2%, indicating efficient operating leverage. This ratio, alongside stable margins and rising fee income, helped support the improvement in profitability and provided room for continued spending on technology and network expansion.

Risk levels remained managed during the quarter. Provisions and contingencies totalled Rs 2,840 crore after considering the release of contingent provisions amounting to Rs 1,040 crore. The release mainly related to a large borrower group that met specified conditions, allowing the bank to unwind earlier prudential buffers.

After excluding the effect of this contingency release, the total credit cost ratio stayed contained at 0.55%. This reflects conservative underwriting standards, sound collection practices and a largely stable portfolio across retail and wholesale segments. It also aligns with the reported improvement in gross and net non-performing asset ratios.

Asset quality excluding the agricultural segment showed further strength. GNPA, excluding agricultural NPAs, was 0.97% as of December 31, 2025. This compared with 0.99% at the end of September 2025 and 1.19% in the same quarter a year earlier, underlining resilience in the non-agricultural credit book.

The physical distribution network continued to grow in reach. As of December 31, 2025, HDFC Bank operated 9,616 branches and 21,176 ATMs across 4,170 cities and towns, compared with 9,143 branches and 21,049 ATMs in 4,101 locations a year earlier. Rural and semiurban regions accounted for around half of all branches.

The bank also used alternate distribution channels to extend services. There were 15,216 business correspondents, most operating through Common Service Centers. Employee strength rose to 2,15,739 as of December 31, 2025, from 2,10,219 a year earlier, supporting operations, compliance, technology and customer service across the growing franchise.

Overall results for the December 2025 quarter show HDFC Bank combining profit growth with a stable risk profile. Earnings, deposits, advances and assets all expanded, while asset quality and funding costs stayed contained. The data suggests a broadly balanced position for the bank as it continues to scale operations across markets and products.