HDFC Bank reported a stable performance for the second quarter of FY26 with steady growth in profitability and improved asset quality. The lender’s net interest income (NII) stood at ₹31,552 crore, largely flat sequentially but up 5% year-on-year (YoY), marginally above estimates.
Profit after tax (PAT) came in at ₹18,641 crore, up 3% QoQ and 11% YoY, exceeding Street expectations by 8.1%. The growth was aided by lower provisions and resilient core operations despite a sharp decline in non-interest income.
Pre-provision operating profit (PPOP) stood at ₹27,924 crore, down 22% QoQ, while non-interest income dropped 34% QoQ to ₹14,350 crore. On the other hand, provisions fell sharply by 76% QoQ to ₹3,501 crore, providing a significant boost to profitability.
Asset quality improved notably during the quarter. Gross Non-Performing Assets (GNPA) ratio declined to 1.24% from 1.40% in Q1FY26, while Net NPA (NNPA) improved to 0.42% from 0.47%, reflecting better loan recoveries and disciplined underwriting.
Overall, HDFC maintained strong operating metrics with steady interest income, improved asset quality, and a notable reduction in provisioning costs, offsetting weakness in other income segments.
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