India Ratings has affirmed HDFC Bank’s long-term issuer rating at ‘IND AAA’/Stable and assigned a rating of ‘IND A1+’ to additional certificates of deposit. The affirmation reflects HDFC’s financial strength, diverse earning profile, and systemic importance in the Indian banking sector. The bank’s strong capital buffers and market access support higher advances growth. The rating agency consolidated HDFC’s subsidiaries while arriving at the ratings.
Rating Affirmation and New Ratings
India Ratings has affirmed HDFC Bank Limited’s long-term issuer rating at ‘IND AAA’ with a Stable Outlook. Concurrently, additional certificates of deposit have been assigned a rating of ‘IND A1+’. This rating action was announced on November 17, 2025.
Key Rating Drivers
The ratings reflect HDFC’s financial strength and diverse earning profile, sustained by strong performance in the Indian banking system. HDFC’s systemic importance is underscored by its position among private banks and its classification as a domestic systemically important bank by the Reserve Bank of India (RBI) since 2017. HDFC’s solid capital buffers and market access allows it to strategically target higher-than-system advances growth.
Subsidiary Performance
HDFC maintains a strong presence across financial services including banking, brokerage, and asset management, though its subsidiaries’ contribution to the consolidated profitability remained at 4.9% in Q2FY26. The life insurance business had a 17% market share for individual weighted received premium among private life insurance players in India during Q2FY26. The asset management business had a market share of 11.4% with a 25% penetration in the mutual fund industry.
Asset Quality and Profitability
HDFC demonstrated a robust provision coverage ratio. The bank’s gross NPAs are maintained at 0.9%-1.5%. The bank’s gross NPAs declined to 1.24% in Q2FY26. HDFC’s efficient risk management practices aided in maintaining the gross NPAs performance. With operating buffers (pre-provisioning operating profit/provisions) of 8.6x in FY25, the bank is well-positioned to handle potential asset quality stress.
Loan Growth and Retail Performance
During Q2FY26, HDFC’s overall advances grew 4.5% qoq, led by 4.72% qoq growth in corporate loans. Retail commands a 51.7% share of the loan book compared to 39.3% pre-merger.
Liquidity and Funding
HDFC had an overall funding deficit of 1.60% in the cumulative one-year bucket as a percentage of the total assets in FY25. HDFC maintained a liquidity coverage ratio of 120% at Q2FYE26.
Source: BSE
