Mumbai, October 18, 2026: HDFC Bank, India’s largest private-sector lender, reported a 4.7% year-on-year increase in standalone net profit to ₹19,510 crore for the quarter ended September 30, 2026. However, the result fell marginally short of analyst estimates as weaker treasury income and higher expenses offset growth in lending and deposits.
The earnings announcement also coincided with a significant leadership transition. Deputy Managing Director Kaizad Bharucha is set to step down on December 31, while Anup Bagchi is scheduled to take over as Managing Director and Chief Executive Officer (MD and CEO) on October 27.
Profit Rises but Marginally Misses Estimates
HDFC Bank’s standalone net profit increased to ₹19,510 crore during the September quarter, compared with the corresponding period last year.
Analysts had expected profit of approximately ₹19,526 crore, leaving the lender marginally below market expectations. Weaker treasury performance and higher operating costs limited the overall growth in earnings.
Net Interest Income Increases 9.7%
The bank’s net interest income (NII), which measures the difference between interest earned on loans and interest paid on deposits, rose 9.7% to ₹34,619 crore.
The increase reflected continued lending growth despite pressure on margins across the banking sector.
Loan Book Expands 16.3%
HDFC Bank’s total loans grew 16.3% year on year, indicating continued demand across its lending businesses.
The expansion comes as the lender continues to manage its balance sheet following its merger with HDFC Ltd. Sustaining credit growth while maintaining funding stability will remain an important priority for the bank.
Deposits Grow 18.8%
Deposits increased 18.8% year on year, outpacing loan growth during the quarter.
The growth supported the bank’s funding position, while its credit-to-deposit ratio stood at approximately 96%. Deposit mobilisation remains important as lenders compete to secure funding for expanding their loan portfolios.
Lower Treasury Income Weighs on Earnings
Weaker treasury performance was one of the main factors limiting profit growth.
Trading gains fell to approximately ₹780 crore from ₹2,390 crore a year earlier. Total other income declined 3.6% to ₹13,831 crore, reflecting the impact of lower treasury-related earnings.
Provisions and Operating Costs Increase
Provisions for bad loans and other contingencies increased 2.1% year on year, partially offsetting the gains from higher interest income.
Operating expenses also rose to approximately ₹18,970 crore, compared with ₹17,980 crore in the corresponding quarter last year. The combination of higher costs and reduced treasury gains constrained the bank’s overall earnings growth.
Asset Quality Shows Improvement
HDFC Bank’s gross non-performing asset (NPA) ratio improved to 1.11%, down from 1.17% in the previous quarter.
The decline indicates an improvement in the reported proportion of loans classified as non-performing. Maintaining asset quality will remain important as the bank continues to expand its lending operations.
Kaizad Bharucha to Step Down After More Than Three Decades
HDFC Bank has confirmed that Deputy Managing Director Kaizad Bharucha intends to step down effective December 31, 2026.
Bharucha has spent more than three decades with the institution and has played a significant role in developing its wholesale and corporate lending businesses. His departure will mark the end of a long tenure within the bank’s senior leadership.
Bharucha Had Been Considered for the Top Position
Bharucha had been viewed as a potential internal candidate to succeed outgoing MD and CEO Sashidhar Jagdishan.
However, the Reserve Bank of India approved Anup Bagchi, an experienced executive from the ICICI Group, as the bank’s next chief executive. The appointment marks a change in leadership succession at the lender.
Anup Bagchi to Take Over on October 27
Bagchi is scheduled to assume the role of Managing Director and CEO on October 27 for a three-year term ending October 26, 2029.
His appointment is notable because he will become HDFC Bank’s first externally appointed CEO, according to the reports cited.
Bagchi to Engage With Regulators and Customers
Before formally taking charge, Bagchi has indicated that he intends to engage with regulators, customers and other stakeholders.
The discussions are expected to help him understand their priorities and concerns before shaping the bank’s operational and strategic agenda.
Leadership Transition Marks a New Chapter
The leadership changes represent a significant transition for HDFC Bank.
Jagdishan’s tenure is scheduled to end on October 26, while Bharucha’s departure at the end of December will bring further changes to the bank’s senior management structure.
The transition comes as the lender continues to manage its post-merger strategy and balance growth with profitability, funding requirements and asset quality.
Investors Focus on Growth and Profitability
The September-quarter results show continued expansion in loans and deposits, alongside pressure from lower treasury gains and rising operating expenses.
Investors will be watching how the incoming leadership manages margins, deposit mobilisation, credit growth and the integration of the bank’s post-merger operations.
Attention Turns to Bagchi’s Strategy
With Bagchi set to take charge on October 27, attention is expected to shift towards his priorities for the bank’s next phase.
Key areas to watch include sustaining lending growth, strengthening profitability, managing funding costs and maintaining asset quality across HDFC Bank’s extensive balance sheet.
Source: HDFC Bank, Reuters, Business Standard
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