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- **Economic Momentum**: Domestic economy strengthens on fiscal and monetary measures, driving loan growth and market share gains.
- **NIM Outlook**: NIM compression (8 bps) expected to reverse as deposit repricing gains traction over 6-12 months.
- **AI and Tech Investment**: Strategic focus on AI experiments and core platform upgrades to enhance customer experience.
- **Capital Strength**: CET1 ratio maintained above thresholds, with capital for 3-4 years of growth without raises.
- **Home Loan Success**: 2-3 day turnaround time, 98% savings account upsell, and 14% credit card penetration.
- **SME Recovery**: Healthy credit demand and stable asset quality in SME segment.
- **Cross-Border Opportunities**: Potential to participate in cross-border M&A as RBI guidelines evolve.

**【CEO Summary Section】**
- Domestic economy shows strength due to fiscal and monetary measures, including tax reductions and interest rate cuts, driving economic activity.
- Loan growth accelerated across segments, with market share gains in deposits.
- NIM compressed by 8 bps due to front-loaded asset repricing, but deposit repricing expected to provide tailwind over 6-12 months.
- Investing in AI and core technology platforms to improve customer experience and operational efficiency.
- Asset quality remains healthy, with NPA at 1.24% and no significant issues in early indicators.

**【CFO Financial Commentary】**
- Recoveries and upgrades contributed to a 10 bps reduction in NPA, with contingent provisions increased by INR 1.6 billion.
- Margins expected to stabilize with a positive bias as deposit repricing impacts NIMs.
- LDR target is to reduce below 90% over time, with strategic focus on disciplined pricing.
- Capital management maintains CET1 ratio above regulatory thresholds, with plans for 3-4 years of growth without additional capital raises.
- Fee income grew 9% YoY, driven by consistent product performance.

**【Q&A Highlights】**
- **Margins and Repricing**: Asset-side repricing largely complete, while deposit repricing will take 6+ quarters. Cost of funds improved 18 bps QoQ, with further declines expected.
- **LDR and Growth**: LDR rose due to strong credit demand, but strategic focus on growing faster than the system from FY '27.
- **Capital Utilization**: Extra capital from regulatory changes will support growth, with potential shareholder returns if opportunities arise.
- **Home Loans**: Turnaround time reduced to 2-3 days, with upsell penetration in savings accounts (98%), credit cards (14%), and consumer durables (mid-30s).
- **SME Growth**: Healthy credit demand and stable asset quality in SME segment.
- **Cross-Border M&A**: RBI guidelines may open opportunities for banks to participate in cross-border transactions, pending final guidelines.


HDFC Bank Limited (HDB) Q2 2026 Earnings Call Transcript

Revenue

Sales and Services Revenue

Financing Services Revenue

Other Revenue

Cost of Revenue

Cost of Goods and Services

Cost of Financing Services

Other Cost

Gross Profit

Other Operating Income

Operating Expenses

Selling, General and Administrative Expenses

Selling and Marketing Expenses

General and Administrative Expenses

Research and Development Expenses

Loss on Bad Debts

Loss on Impairment of Other Assets

Loss on Disposal of Assets

Other Operating Expenses

Operating Income

Non-Operating Income (Loss)

Income (Loss) from Affiliates

Income (Loss) from Associates

Income (Loss) from Joint ventures

Gain (Loss) on Other Investment

Gain (Loss) on Change in Fair Value

Gain (Loss) on Foreign Currency Exchange

Other Non-Operating Income (Loss)

Net Interest Expense

Interest Expense

Interest Income

Pretax Income From Continuing Operations

Income Tax Expense

Current Income Tax

Deferred Income Tax

Income Tax Adjustments

Net Income from Continuing Operations

Income from Discontinued Operations

Other Items Before Net Income

Net Income

Net Income Attributable to Minority Interests

Net Income Attributable to Owners of the Company

Preferred Stock Dividends

Other Adjustments

Net Income Attributable to Common Stockholders

Other Comprehensive Income

Total Comprehensive Income

Total Comprehensive Income Attributable to Minority Interests

Total Comprehensive Income Attributable to Owners of the Company

Basic EPS

Basic EPS from Continuing Operations

Basic EPS from Discontinued Operations

Diluted EPS

Diluted EPS from Continuing Operations

Diluted EPS from Discontinued Operations

HDB

HDB fundamentals

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