Competition between SBI and HDFC Bank: Which financial powerhouse leads after their first-quarter earnings?
State Bank of India (SBI) and HDFC Bank, two of India's leading financial institutions, have recently released their quarterly and annual results for the June 2025 quarter and the financial year 2025 (FY25).
SBI's net Non-Performing Assets (NPAs) for the June 2025 quarter stood at 0.47%, a decrease from 0.57% a year earlier. This decline in NPAs was accompanied by a growth in total advances, which increased 11.6% year-over-year (y-o-y) to Rs 42.5 lakh crore. SBI's standalone net profit also saw a significant rise, growing nearly 12.5% y-o-y to Rs 19,160.4 crore in the June 2025 quarter.
On the other hand, HDFC Bank reported a slight increase in NPAs, with a percentage of 0.47%, up from 0.39% a year earlier. However, the bank's total advances grew 5.4% y-o-y to Rs 26.19 lakh crore. HDFC Bank's standalone net profit also rose 12.2% y-o-y to Rs 18,155 crore in the same quarter.
In terms of return on assets (ROA), HDFC Bank generally achieved a higher ROA compared to SBI. HDFC Bank's ROA during FY25 was 1.91%, while SBI's was 1.1%. It's worth noting that HDFC Bank's ROA was 0.48% in the June 2025 quarter, while SBI's was 1.14%. On an annualized basis, HDFC Bank's ROA would be nearly 1.92% for the full financial year, while SBI's would be lower.
SBI's growth in total advances was led by Small and Medium Enterprises (SME) loans, which grew 16.9% y-o-y to Rs 5.06 lakh crore. HDFC Bank's advances also grew, reaching Rs 26.28 lakh crore in the first quarter of FY26, marking a 6.7% y-o-y increase.
The net interest margin (NIM) for all three banks saw a decrease. For SBI, the domestic NIM during FY25 was 3.22%, down from 3.43% a year earlier. For HDFC Bank, the domestic NIM during FY25 was 3.48%, down from 3.53% a year earlier. HDFC Bank's NIM in the June 2025 quarter was 3.5%, down from 3.7% a year earlier.
As of Friday, HDFC Bank's share price is Rs 953.4, while SBI's is Rs 802.4. It's important to note that HDFC Bank has a larger market capitalization than SBI.
These results provide insights into the performance of these two significant players in the Indian banking sector. As the economy continues to evolve, it will be interesting to see how these banks adapt and grow in the coming years.
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