HDFC Bank, India’s largest private sector lender, on Saturday reported a 13 per cent quarter-on-quarter decline in consolidated net profit for the first quarter of FY26, even as it announced its first-ever bonus issue and a special interim dividend for shareholders.
The bank posted an unaudited consolidated net profit of Rs 16,257.91 crore for the April-June quarter, down from Rs 18,834.88 crore in Q4 FY25. On a year-on-year basis, the profit was marginally lower by 1.3 per cent compared to Rs 16,474.85 crore reported in Q1 FY25 (after accounting for minority interest).
Interest income, expenses edge up HDFC Bank earned an interest income of Rs 77,470 crore during the quarter under review, up 6 per cent from Rs 73,033 crore in the same quarter last year. However, interest expenses also increased by 6.6 per cent to Rs 46,032.23 crore, compared to Rs 43,196 crore in Q1 FY25.
As a result, the bank’s net interest income (NII) – the difference between interest earned and interest paid – rose 5.4 per cent year-on-year to Rs 31,439 crore for the quarter ended June 30, 2025, from Rs 29,839 crore in the previous year.
Bonus issue and dividend announcement
In a major shareholder-friendly move, HDFC Bank announced a 1:1 bonus issue, its first-ever, offering one equity share for every fully paid-up equity share held as of the record date, which has been set as August 27, 2025.
Additionally, the board declared a special interim dividend of Rs 5 per share for FY 2025-26, to be paid to eligible members on August 11.
Asset quality remains stable
The bank’s asset quality showed a slight deterioration. The gross non-performing asset (GNPA) ratio stood at 1.40 per cent, while the net NPA ratio came in at 0.47 per cent as of June 30 – both marginally higher than the figures recorded a year ago.
IPO gain from HDB Financial
The lender also booked a significant pre-tax gain of Rs 9,128 crore from the initial public offering of its subsidiary, HDB Financial Services, through an offer for sale of shares.
Despite the sequential dip in profit, the bank’s robust capital position and strategic moves — including the bonus share issue and dividend — signal strong shareholder confidence as it heads further into FY26.