HDFC Bank reports strong loan growth, stable asset quality in Q2 FY26

HDFC Bank Limited announced its unaudited financial results for the quarter and half-year ended September 30, 2025, confirming accelerated loan growth across segments. Despite front-loaded interest rate cuts leading to an 8 basis point compression in Net Interest Margin (NIM) this quarter, the Bank anticipates tailwind effects from deposit repricing over the next 6 to 12 months. Asset quality remains healthy, with contingent provisions increasing by approximately INR 1,600 crores and general provisions by about INR 600 crores.

The Bank's capital ratios have built up due to a slowdown in FY25, and with a return to a growth path from FY27, capital consumption is expected to increase, particularly with a retail-oriented mix. The capital generated in the quarter matched consumption at 60 basis points, with the overall capital ratio change at 0.1 basis points. The Bank aims for its credit deposit ratio to fall below the 90-mark by FY27.

Home loan efforts are progressing well, with turnaround times for salaried loans reduced to two days and self-employed loans to three days. Credit card penetration for new mortgages is over 14%, consumer durable sanctions are in the mid-30s, and brokerage account penetration exceeds 15%. Average deposits grew about 15% year-on-year, with retail deposits contributing approximately 83%. Fee income saw about 9% growth, primarily volume-related and consistent with regular growth patterns.