HDFC Bank posted a fiscal fourth-quarter net profit of Rs 17,616 crore, up 6.7% from a year-ago period and 5.3% a quarter ago, as net interest income (NII) stood higher and asset quality improved.

The country's biggest private lender reported net interest income of Rs 32,070 crore, up 10.3% from the same quarter in the previous year and 4.6% in the preceding quarter. NII is the difference between interest earned and paid.

NIM

Net interest margin rose to 3.54% from 3.43% on total assets and to 3.73% from 3.62% on interest-earning assets. Excluding Rs 11,700 crore of interest on income tax refund, core net interest margin was at 3.46% on total assets and 3.65% on interest-earning assets.

Asset quality

The lender's asset quality improved, with its gross non-performing assets (NPA) ratio shrinking to 1.33% at the end of March, from 1.42% three months earlier. In the year-ago period, however, gross NPA was lower at 1.24%.

The net NPA ratio rose to 0.43% from 0.33% a year ago but fell from 0.46% in the October-December 2024 quarter.  

Deposits versus loan growth 

In the fiscal fourth quarter ended March, HDFC Bank’s deposits grew at a higher rate than credit. While deposits grew 14.1% year-on-year to Rs 27.15 lakh crore as of 31 March 2025, gross advances stayed subdued at a 5.4% rise to Rs 26.43 lakh crore. But this was more due to post-merger issues with parent HDFC Ltd, and was in line with the strategy of growing advances at a slower pace in FY25, then bringing it on-par with the banking sector in FY26 and eventually racing faster than industry in FY27. Since the credit-to-deposit ratio had shot up post-merger, the plan was to bring this down. The lender thus securitised loans worth Rs 10,700 crore in Q4 of FY25.

Sequentially, the Mumbai-based lender's deposits rose 5.9% while gross advances, or loans sanctioned and disbursed, rose around 4%.

The bank’s total balance sheet size as of 31 March 2025 was Rs 39.10 lakh crore, as against Rs 36.17 lakh crore a year ago. 

Dividend

HDFC Bank's board recommended a dividend of Rs 22 per equity share of Re 1 each for the year ended 31 March 2025.

Capital adequacy

The bank's total capital adequacy ratio (CAR) as per Basel III guidelines was at 19.6% as on 31 March 2025.