HDFC Bank Limited

What they do

HDFC Bank Ltd. is an Indian commercial bank conducting retail and wholesale banking, treasury operations, and insurance activities largely through subsidiaries and affiliates. Income before income tax expense, income tax expense and income taxes paid are substantially all from India. The bank is subject to local regulation requiring transfer of 25% of profit after tax under Indian GAAP to a non-distributable statutory reserve, plus other conditions, before paying dividends without prior RBI approval.

Revenue drivers

• Retail loans — Retail lending is evidenced by recoveries against write-off cases from retail loans, which ranged from Rs. 44,432.2 million to Rs. 47,696.8 million across the periods disclosed. Crop-related agricultural loans with days past due less than 366 days are not considered non-performing, a balance of Rs. 65.1 billion.
• Wholesale loans — Wholesale lending is shown by recoveries against write-off cases from wholesale loans, ranging from Rs. 178.1 million to Rs. 4,258.7 million across the disclosed periods.
• Treasury and securities — Investments include debt securities such as Government of India securities, state government securities, government securities outside India, credit substitutes, debentures, and other corporate/financial institution bonds, plus mortgage- and asset-backed securities. Foreign currency debt can be indexed to the secured overnight financing rate, T-bill rates, and marginal cost of funds based lending rates.
• Insurance and affiliates — Other assets include reinsurance assets of Rs. 93,391.5 million to Rs. 104,321.2 million and deferred acquisition assets of Rs. 148,175.6 million to Rs. 241,672.2 million as of March 31, 2025 and March 31, 2026. Liabilities on policies in force include only the fair value of contracts classified as insurance contracts.

Recent performance

Recoveries against write-off cases across the disclosed periods totaled Rs. 46,492.3 million (US$ 544.3 million), Rs. 47,696.8 million (US$ 508.3 million), and Rs. 48,690.9 million. Of the total transfers to the statutory reserve, Rs. 80,557.3 million (US$ 943.0 million) pertains to the acquisition of eHDFC. Unrealized gain/(loss) recognized in non-interest revenue other, net was Rs. (159.3) million for fiscal 2025 and Rs. 4,081.3 million for fiscal 2026. On the sale of the Bank's stake in HDBFSL, a deferred tax liability of Rs. 3,375 million recognized in the previous year was reversed in fiscal 2026. Deferred taxes on outside basis differences related to investments in affiliates of Rs 16,453.9 million were included in Others in the current year.

Strategy

The bank operates under Indian regulatory requirements to transfer 25% of profit after tax (Indian GAAP) to a non-distributable statutory reserve and to meet other conditions before paying dividends without prior RBI approval. Corporate actions include a 1:1 bonus issue on August 28, 2025, which adjusted share counts to 2,329,251,668 equity shares after cancellation of 1,164,625,834 shares upon business combination. The bank has also divested its stake in HDBFSL, reversing an associated deferred tax liability of Rs. 3,375 million in fiscal 2026. Its investment and funding mix includes domestic and foreign government securities, credit substitutes, and debt indexed to benchmark rates.

Risks

• Regulatory capital and dividend constraints — Indian rules require transfer of 25% of profit after tax to a non-distributable statutory reserve and other conditions before paying dividends without prior RBI approval.
• Credit quality in retail and agricultural lending — Crop-related agricultural loans with days past due less than 366 are not treated as non-performing, and loans up to 30 days past due are considered current.
• Foreign currency and benchmark rate exposure — Variable rate debt is indexed to the secured overnight financing rate, T-bill rates, and marginal cost of funds based lending rates, among others.
• Concentration in India — Income before income tax expense, income tax expense and income taxes paid are substantially all from India.

Outlook

The filing discloses no forward guidance beyond accounting for the New Labour Codes notified on November 21, 2025, and the reversal of a Rs. 3,375 million deferred tax liability from the HDBFSL stake sale in fiscal 2026. Recoveries and statutory reserve transfers are disclosed historically without projections. No management forecast of future results is provided in the excerpts.