HDFC Bank Limited (HDB) FY2026 20-F and Q2 FY2027 6-K Summary

Business

Source: Annual Report on Form 20-F for fiscal 2026, accession 0001193125-26-322004.

HDFC Bank is one of India's largest private-sector banks. It takes deposits from, and lends to, retail customers, small businesses and corporations across metro, urban, semi-urban and rural India. Most of its income is the spread between what it earns on loans and securities and what it pays on deposits and borrowings: net interest revenue after credit-loss provisions was 57.2% of net revenue in fiscal 2026. The rest comes from fees and commissions (cards, payments, lending fees, distribution of mutual funds and insurance, investment management) and from insurance premiums. Through its subsidiaries it is also a life insurer, a mutual fund manager, a non-bank lender and a stockbroker. Almost all revenue comes from India; the overseas operations are not material.

In fiscal 2026 net revenue (net interest revenue after provisions plus net non-interest revenue) was $26.34 billion. Here is how it split across the bank's reporting segments:

• Retail banking (53.1%): deposits, housing loans, auto, personal and two-wheeler loans, credit cards, retail business banking, commercial vehicle and construction equipment finance, gold loans, and loans against securities, plus sales of third-party mutual funds and insurance. Retail loans were 74.7% of gross loans at March 31, 2026, and 18.5% of them were unsecured.
• Wholesale banking (12.2%): working capital and term lending, trade finance, cash management, custody, clearing services for stock exchanges, and structured supply-chain finance for corporate customers. Since the merger with HDFC Limited it also does construction finance.
• Treasury services (2.7%): balance-sheet liquidity and interest-rate management, foreign exchange and derivatives for clients, and proprietary trading, mainly in Indian government securities.
• Insurance services (29.8%): life insurance through HDFC Life, in which the bank holds 50.2%.
• Others (2.2%): mainly asset management through HDFC AMC (52.4%), manager of HDFC Mutual Fund, one of India's largest mutual funds, and real-estate equity financing through HDFC Capital (89.7%).

Two other businesses sit inside these figures. The bank owns 74.6% of HDB Financial Services, a listed non-deposit-taking finance company that makes mortgage, commercial vehicle, consumer and gold loans. It owns 94.3% of HDFC Securities, a stockbroker. It also holds 50.3% of HDFC ERGO General Insurance, a joint venture with ERGO International AG of the Munich Re Group. Because of HDFC ERGO's governance arrangements, the bank accounts for it under the equity method.

At March 31, 2026 the bank had:

• 9,689 branches, 50.2% of them in semi-urban and rural areas;
• 21,172 ATMs and cash deposit and withdrawal machines in 4,175 cities and towns;
• 14,400 business correspondents;
• more than 100.6 million customers.

Total assets were $560.81 billion. Loans were $330.32 billion and deposits $330.40 billion; net customer assets, which also include credit substitutes, were 100.9% of deposits. 66.9% of loans carried a variable interest rate. Low-cost current and savings accounts were 32.3% of average deposits in fiscal 2026, and the average cost of funds, including equity, was 3.8%. Return on tangible equity was 12.4%, down from 13.4% in fiscal 2025. The total capital adequacy ratio was 19.7% and the Common Equity Tier 1 ratio 17.3%.

The bank's current shape comes from its July 1, 2023 merger with its former parent, the mortgage lender Housing Development Finance Corporation Limited (HDFC Limited). HDFC Limited shareholders received 42 bank shares for every 25 HDFC Limited shares. The merger brought in the housing-loan book, the insurance and asset-management subsidiaries, and a large stock of higher-cost long-term borrowings. As directed by the Reserve Bank of India (RBI) in connection with the merger, the bank has made several disposals:

• It cut its stake in the education lender HDFC Credila to 9.99%.
• It sold all of HDFC Education and Development Services in October and December 2024.
• It is exploring ways to reduce its 15.0% stakes in Housing Development Finance Corporation Plc and First Housing Finance (Tanzania).

Separately, RBI rules require non-bank finance companies designated "upper layer" to list within three years. To comply, HDB Financial Services went public, and its shares listed on July 2, 2025. The bank sold shares worth 100 billion rupees ($1.16 billion) in the IPO.

In fiscal 2026 the bank issued one bonus share for every share held (record date August 27, 2025). All per-share and per-ADS figures are restated for this bonus issue, and one ADS still represents three shares.

Management's stated strategy has six strands:

• "Shift Right", its framework for modernising core technology, digital channels and the controlled use of automation and generative AI, including a unified generative-AI platform called Neev;
• winning market share in India's growing financial-services market;
• cross-selling the group's banking, insurance and mutual-fund products, including to former HDFC Limited customers who did not previously bank with it;
• keeping asset quality strong;
• keeping its funding costs low by expanding current and savings deposits;
• making ESG principles part of the wider business strategy.

Risk factors

Source: Form 20-F for fiscal 2026, accession 0001193125-26-322004.

These are the risks that bear most directly on the investment case, condensed from the annual report:

• Funding mix and the loan-to-deposit balance after the merger. The merger brought in HDFC Limited's mortgage book together with a large volume of high-cost borrowings. Before it, loans were smaller than deposits; by March 31, 2026 the two were roughly equal. Low-cost current and savings accounts fell from 43.5% of average deposits in fiscal 2023 to 32.3% in fiscal 2026. Over the same period the cost of funds rose from 3.9% to 4.6% and the spread narrowed from 4.0% to 2.7%. The bank says it intends to reduce loans relative to deposits over the next few years and will not pursue growth that misses its risk-adjusted return thresholds, and that slower loan growth could weigh on growth and profitability. Most funding is short- and medium-term: 34.1% of deposits mature within a year, against 24.8% of loans.
• Interest-rate sensitivity. Net interest margin fell from 4.4% in fiscal 2023 to 3.8% in fiscal 2024 because of the merger, and was 3.6% in fiscal 2026. The bank says the fiscal 2026 dip came from RBI rate cuts passing through to its floating-rate loans faster than to its deposits, partly offset by a decline in the higher funding costs carried over from the merger. It also notes a growing customer preference for time deposits, which raises its sensitivity to rate changes.
• Governance and reputation. On March 18, 2026, part-time chairman Atanu Chakraborty resigned with immediate effect. He said certain happenings and practices at the bank over the prior two years were not in line with his personal values and ethics, but raised no specific allegations. The RBI issued a statement supporting the bank's governance and management. A three-month external legal review, overseen by a special committee of independent directors, concluded that his statement and its implications were not substantiated. The bank says the episode nonetheless had a material adverse effect on the price of its shares and ADSs and heightened its reputational, litigation and regulatory risk. Keki Mistry served as interim chairman, and former Finance Secretary Rajiv Kumar became part-time chairman on July 15, 2026 with RBI approval. Separately, family members of the guarantors of Splendour Gems Limited, a borrower the bank is pursuing for recovery, have brought several legal actions against the bank and its senior management. On May 5, 2026, the Bombay High Court quashed a criminal complaint against the chief executive, finding it retaliatory to the bank's recovery proceedings; an appeal is pending in the Supreme Court.
• Regulatory penalties and supervision. Between 2023 and 2025 the RBI imposed a series of individually small monetary penalties, covering deposit practices, recovery-agent conduct, know-your-customer categorisation, foreign-exchange rules and permitted business activities. On September 25, 2025, the Dubai Financial Services Authority barred the bank's Dubai International Financial Centre branch from taking on new clients for specified services, citing onboarding and advisory failings. The bank calls that branch immaterial. Two RBI rule changes take effect on April 1, 2027: new provisioning directions that move banks to an expected-credit-loss approach, and a new standardised framework for the capital charge on credit risk. Both could raise provisions or risk-weighted assets.
• Capital requirements. The RBI moved the bank into a higher systemic-importance bucket after the merger, adding 0.2 percentage points of buffer from April 1, 2025. That makes the minimum total capital ratio 11.9%, against the bank's 19.7%. The bank says a falling ratio would limit growth, and that it may not be able to raise capital on acceptable terms.
• Credit quality and concentration. Gross non-performing customer assets were 1.2% at March 31, 2026, and 78.0% of the loan book was wholly or partly secured. The largest single customer exposure was $4.12 billion (6.6% of capital funds). The ten largest totalled $25.59 billion (41.0% of capital funds), and none of them was non-performing. Unsecured personal loans and cards carry higher loss risk. RBI priority-sector lending rules force lending to sectors such as agriculture, with shortfalls placed in low-yield deposits. After the merger the RBI gave the bank three years to meet its enlarged priority-sector targets.
• Merger execution. The bank warns it may not realise all the expected benefits and cost savings of the HDFC Limited merger, or that they may take longer and cost more. It also says integration has diverted management attention. Goodwill and intangible assets from the merger could become impaired.
• Insurance and asset-management subsidiaries. The bank's results are exposed to its insurers' mortality, persistency and claims experience, their solvency requirements, and their reliance on bancassurance partners. HDFC AMC is subject to SEBI rules and market risk. The joint-venture partner in HDFC ERGO has significant voting power over that business.
• Macroeconomic and geopolitical shocks. The bank names the war in Iran involving the United States and Israel, the closure of the Strait of Hormuz, India-Pakistan tensions, and US tariffs. It cites the RBI's forecasts for fiscal 2027 of 6.6% GDP growth and 5.1% average CPI inflation, both affected by higher energy prices.
• Technology and cyber risk. The bank cites hacking, phishing, ransomware and AI-driven attacks, and the operational and legal risks of its own use of AI and generative AI. It says cybersecurity incidents have damaged its reputation in the past.
• ADS-specific risks. The ADSs have historically traded at a premium to the underlying shares, which may not last. ADS holders cannot vote, and foreign-ownership limits may restrict investment.

Management's discussion: fiscal 2026 results

Source: Form 20-F for fiscal 2026, accession 0001193125-26-322004 (U.S. GAAP).

Net income was $7.98 billion in fiscal 2026, up 0.1% in dollars (up 4.6% in rupees). Behind that small gain, lending margins were squeezed, merger-era borrowing costs fell, and trading and foreign-exchange income dropped.

Net interest revenue rose to $16.97 billion, up 2.2% in dollars (up 6.8% in rupees). Interest income on loans grew only 1.5% in rupees although the average loan book grew 8.4%. The difference is yields, which fell as the RBI cut its policy rate from 6.5% to 5.25% during 2025: retail loan yields went from 9.7% to 9.3% and wholesale from 8.5% to 7.3%. Interest on securities rose 14.9% in rupees on a larger investment portfolio. On the funding side, interest on deposits rose 10.2% in rupees because time deposits grew, and the current-and-savings share of the bank's deposits slipped from 34.8% to 34.1%. Interest on long-term debt fell to $4.24 billion from $5.58 billion (down 20.5% in rupees) as the average balance of that debt fell. That debt was largely inherited from HDFC Limited. Net interest margin was 3.6%.

Credit-loss provisions fell to $1.90 billion from $2.15 billion (down 7.2% in rupees). The bank attributes the fall to better asset quality and updated estimates. Retail provisions fell, with lower charges on other retail loans partly offset by higher charges on personal loans and cards. Wholesale provisions were a net release. Provisions stayed at 1.9% of gross loans.

Non-interest revenue was $11.27 billion, down 1.5% in dollars (up 3.0% in rupees):

• Fees and commissions rose to $4.04 billion (up 10.0% in rupees), led by lending-related fees, payments and cards, and investment-management fees.
• Insurance premium income rose to $6.18 billion (up 9.6% in rupees) on new-business and renewal premiums at HDFC Life.
• Gains on available-for-sale securities rose sharply.
• Combined foreign-exchange and derivatives income collapsed to $113.18 million from $900.26 million, and trading gains fell 57.5% in rupees.

Non-interest expense was $15.30 billion, up 6.8% in rupees, which lifted it slightly to 58.1% of net revenue from 57.8%:

• Salaries rose 6.5% in rupees on annual wage revisions, even though employee numbers fell from 214,521 to 211,178.
• Premises costs rose 17.1% in rupees on higher premises and infrastructure costs.
• Insurance claims and benefits rose 7.0% in rupees on higher maturities, surrenders and death claims.

Income tax was $2.40 billion. The effective rate rose to 22.6% from 20.3%, because fiscal 2025 had been lowered by a $195.19 million tax benefit recognised after favourable orders, mainly relating to the former HDFC Limited.

Balance sheet and capital. Total assets grew 9.2% in rupees. Gross retail loans grew 9.5%, mainly retail business banking, commercial vehicle and construction equipment finance, and other retail loans. Gross wholesale loans grew 12.7%. Under the RBI's Basel III rules, the capital ratios at March 31, 2026 were 17.28% Common Equity Tier 1, 17.73% Tier 1 and 19.71% total capital. Capital expenditure was $541.01 million in fiscal 2026, and the bank plans about $568.05 million for fiscal 2027, mainly on branches, ATMs, data centres and systems.

Management's outlook. Management expects merger-related trends to keep affecting results in the short to medium term. It plans to raise low-cost deposits gradually, raise long-term borrowings to fund long-term assets such as housing loans, manage loan growth and keep an adequate liquidity buffer, and it warns that RBI directed-lending rules may affect these plans.

Current quarter: three months ended September 30, 2026

Source: Form 6-K furnished October 19, 2026, accession 0001193125-26-424680, Exhibit 99 (unaudited Indian GAAP results, subject to limited review by the joint statutory auditors; the bank's standalone figures unless stated otherwise).

Core banking earnings grew this quarter, but lower treasury income held back headline profit:

• Standalone net interest income rose 9.7% in rupees from the year-earlier quarter. Net interest margin was 3.16% on total assets and 3.32% on interest-earning assets.
• Treasury trading gains fell to $81.58 million from $273.66 million.
• Fees and commissions were $1.01 billion, up 0.1% in dollars and 9.6% in rupees.
• Profit after tax rose 4.7% in rupees. The bank says that, excluding treasury trading gains, it rose about 12.6%.
• The cost-to-income ratio was 39.1% and the credit cost ratio 0.44%.

The consolidated segment results show the same pattern. Against the year-earlier quarter:

• Treasury fell to $219.56 million from $482.34 million (down 50.2% in rupees).
• Retail banking rose to $1.10 billion (up 15.6% in rupees).
• Wholesale banking rose to $1.10 billion (up 18.4% in rupees).

Deposits grew faster than loans, in line with the aim the annual report sets out of reducing loans relative to deposits. Period-end deposits rose 18.8% in rupees, against 16.3% for gross advances, and average deposits rose 16.8%, against 14.1% for average advances under management. The mix kept moving toward time deposits: they grew 22.8%, while current and savings deposits grew 10.8% and fell to 31.6% of the total. On loans, small and mid-market enterprise lending grew fastest at 23.5%, ahead of corporate and other wholesale loans at 16.4% and retail loans at 11.7%.

Asset quality kept improving. Gross non-performing assets were 1.11% of gross advances, down from 1.17% at June 30, 2026 and 1.24% a year earlier; excluding agriculture the figure was 0.87%. Net non-performing assets were 0.37%. The total capital adequacy ratio fell to 18.87% from 19.71% at March 31, 2026 and 19.96% a year earlier, with Common Equity Tier 1 at 17.1%. During the half year the bank repaid Tier 1 and Tier 2 capital instruments. Headcount fell to 210,109 from 220,339 a year earlier, while the branch network grew to 9,706.

Three prior-year items distort comparisons for the half year. The half year ended September 30, 2025 included the gain on the bank's sale of HDB Financial Services shares in that company's June 2025 IPO, which was $1.06 billion standalone and $803.80 million consolidated, before tax. It also included a $1.04 billion floating provision and a $132.38 million tax write-back. Standalone provisions for the half year were $697.36 million (down 63.0% in rupees), against $2.08 billion in the prior-year half, which included the floating provision. Standalone half-year profit after tax rose 4.8% in rupees. The results release gives no financial guidance.

Subsequent events

Sources: Form 20-F for fiscal 2026, Note 35 "Subsequent events", accession 0001193125-26-322004; Forms 6-K, accessions 0001193125-26-337484, 0001193125-26-411204 and 0001193125-26-424682.

The annual report lists two events after its March 31, 2026 balance-sheet date:

• Final dividend. On April 18, 2026, the Board recommended a final dividend of Rs. 13.0 per share ($0.42 per ADS) for fiscal 2026, totalling $2.13 billion. Shareholders approved the resolution declaring the dividend at the 32nd annual general meeting on August 5, 2026 (accession 0001193125-26-337484). The half-year cash flow statement in the September 2026 results shows dividends paid of $2.10 billion during the half.
• Bond issue. On June 16, 2026, the bank's IFSC banking unit at GIFT City raised $750 million through five-year 5.067% senior unsecured bonds maturing June 24, 2031.

The September 2026 quarterly results contain no subsequent-events note. Two developments since September 30, 2026 come from the bank's current reports:

• New chief executive. On October 1, 2026, the RBI approved Anup Bagchi, currently MD and CEO of ICICI Prudential Life Insurance, as Managing Director and CEO for three years from October 27, 2026. He succeeds Sashidhar Jagdishan, who retires at the close of business on October 26, 2026. The appointment is subject to shareholder approval (accession 0001193125-26-411204).
• Deputy managing director leaving. On October 17, 2026, the Board accepted Deputy Managing Director Kaizad Bharucha's request to leave the bank at the close of business on December 31, 2026, and forwarded it to the RBI for approval (accession 0001193125-26-424682).

The filings through October 19, 2026 disclose no acquisition, divestiture or new borrowing after September 30, 2026.