HDFC Bank Faces Pressure Amid Declining Profit and Rising Provisions

HDFC Bank announced a 1.31% dip in its consolidated net profit, standing at Rs 16,258 crore for the June 2025 quarter, compared to Rs 16,475 crore the previous year. On a standalone basis, however, the lender reported an increase in net profit to Rs 18,155 crore, up from Rs 16,174 crore.

The growth in core net interest income decelerated to 5%, totaling Rs 31,400 crore for the quarter, as net interest margins contracted to 3.35% from 3.46%, despite a 6.7% growth in gross advances. CFO Srinivasan Vaidyanathan highlighted that 70% of the bank's assets are linked to external benchmarks, making them sensitive to RBI rate revisions.

Provisions soared to Rs 14,442 crore, up from Rs 2,602 crore a year earlier, with a floating provision of Rs 9,000 crore. The gross non-performing assets ratio rose slightly to 1.4%, largely due to reverses in the agricultural sector. The bank's cautious stance on home mortgages continues; it plans to increase home loan offerings across all branches.

(With inputs from agencies.)