HDFCBANK

The margin compression story becomes clearer when examining the bank's funding costs. Interest expended declined to ₹43,528.45 crores from ₹44,136.16 crores in the previous quarter, reflecting some success in managing deposit costs. However, the concurrent decline in interest earned suggests the bank faced challenges in deploying funds at attractive yields, likely due to competitive pressures and cautious credit appetite in certain segments. Operating profit before provisions stood at ₹27,802.92 crores, representing a 2.60% quarter-on-quarter improvement but remaining substantially below the exceptional ₹35,733.96 crores reported in Q2 FY26. The bank's provision coverage ratio remained stable at 67%, whilst gross non-performing assets improved to a multi-quarter low of 1.15%, down from 1.24% in the previous quarter. Net NPAs also declined to 0.38% from 0.42%, underscoring the bank's continued focus on asset quality management.