HDFC Bank vs SBI (2026): NIM, Deposits, NPAs, Growth & Which Bank Is Stronger?
HDFC Bank versus SBI is not really a contest between two similar banks. SBI is India's enormous system-scale lender with a deposit base above ₹54 lakh crore and a loan book that has moved beyond ₹42 lakh crore. HDFC Bank is the country's dominant private-sector banking franchise, with stronger capital ratios and cleaner gross asset quality but a much smaller balance sheet.
The more interesting change in 2026 is that SBI is no longer merely the "cheap PSU bank" side of this comparison. Its Q1 FY2027 loan growth accelerated, profit rose double digits, domestic NIM improved sequentially and gross NPAs fell further.
HDFC Bank, meanwhile, is still working through the economics of its enlarged post-merger balance sheet. Loan and deposit growth remain healthy, but margin recovery is taking longer.
The investment debate has changed
A few years ago, HDFC Bank versus SBI could be simplified into private-sector quality versus PSU valuation. That is too crude now.
SBI's asset quality has improved dramatically from the stressed corporate-loan cycle of the past. Its latest gross NPA ratio is around 1.47%, while its loan book is growing nearly 19% year on year.
HDFC Bank still has the lower gross NPA ratio at 1.17% and a far stronger CET-1 capital buffer at 17.4%. But its Q1 FY2027 NIM remains below the level investors historically associated with the pre-merger HDFC Bank franchise.
The 2026 comparison is therefore about operating momentum versus capital and franchise quality, not simply ownership structure.
HDFC Bank vs SBI: latest operating comparison
| Metric | HDFC Bank | SBI | Current Edge |
|---|---|---|---|
| Market capitalisation | ₹12.56 lakh Cr | ₹9.51 lakh Cr | HDFC Bank |
| Q1 FY27 standalone PAT | ₹19,060 Cr | ₹21,121 Cr | SBI |
| PAT growth YoY | 5.0% reported; ~9.8% adjusted | ~10.2% | SBI on reported growth |
| Net interest income | ₹33,535 Cr | ~₹46,992 Cr | SBI on scale |
| NII growth | 6.7% | ~15% | SBI |
| NIM | 3.26% total assets; 3.40% interest-earning assets | ~3.0% domestic | HDFC on current absolute margin |
| Gross advances | ₹30.61 lakh Cr | Above ₹50 lakh Cr using Q1FY27 growth from FY26 base | SBI on scale |
| Loan growth YoY | 15.4% | 18.63% | SBI |
| Period-end deposits | ₹31.71 lakh Cr | Well above ₹54 lakh Cr | SBI |
| Deposit growth YoY | 14.7% | 9.73% | HDFC on growth rate |
| Gross NPA ratio | 1.17% | 1.47% | HDFC Bank |
| Net NPA ratio | 0.41% | Below 0.5% in latest disclosed range | Both low |
| Capital adequacy | 19.6% | Lower than HDFC's latest level | HDFC Bank |
| CET-1 | 17.4% | Lower than HDFC's latest level | HDFC Bank |
| Dividend yield | 1.59% | 1.68% | SBI slightly |
| Bull Run Score | 38.4/100 | 47.2/100 | SBI |
SBI is bigger where banking scale actually matters
HDFC Bank currently has the larger stock-market valuation, but SBI remains the much larger banking institution by deposits and loans.
This distinction is important because investors often mistake market capitalisation for balance-sheet scale.
HDFC Bank ended June 2026 with period-end deposits of about ₹31.71 lakh crore and gross advances of ₹30.61 lakh crore.
SBI had already crossed ₹54 lakh crore of deposits and ₹42.5 lakh crore of gross advances a year earlier in Q1 FY2026. Its latest Q1 FY2027 disclosure shows another 9.73% growth in deposits and 18.63% expansion in gross loans.
SBI therefore remains a different-size institution operationally, even though HDFC Bank commands the higher listed equity value.
HDFC Bank's deposit growth is faster, but SBI owns the larger funding pool
HDFC Bank is currently growing deposits faster in percentage terms, while SBI has an extraordinary absolute deposit advantage.
HDFC's period-end deposits grew 14.7% year on year to ₹31.71 lakh crore in Q1 FY2027.
SBI's deposits grew about 9.73% year on year, but from a base that was already above ₹54 lakh crore in June 2025.
For HDFC Bank, deposit growth is especially important because the merged institution needs to rebalance the relationship between its enormous loan book and deposit funding.
For SBI, the issue is different. The bank already has one of India's deepest liability franchises. The question is whether it can retain an attractive funding mix while loan growth runs substantially faster than deposit growth.
SBI is growing loans faster
SBI's latest gross loan growth of 18.63% exceeds HDFC Bank's 15.4% growth in gross advances.
That is notable because SBI is growing from the larger balance-sheet base.
HDFC's composition also deserves attention. Retail loans grew only 7.2%, while small and mid-market enterprise lending grew 18.7% and corporate and wholesale loans grew 18.6%.
The shift means HDFC's aggregate growth is increasingly being supported by non-retail segments.
SBI's loan book benefits from broad exposure to retail, home finance, agriculture, SMEs, infrastructure and large corporates. Strong credit demand therefore reaches the bank through several channels.
The margin comparison is closer than many investors assume
HDFC Bank still reports the higher absolute NIM, but SBI's margin has improved sequentially and its NII growth is much stronger.
HDFC Bank reported a Q1 FY2027 NIM of 3.26% on total assets and 3.40% based on interest-earning assets.
SBI's domestic NIM was about 3.0% in its latest June quarter, up sequentially.
The absolute margin therefore still favours HDFC.
But HDFC's NII grew only 6.7% year on year. SBI's NII rose almost 15%.
That difference matters because a bank can report a higher margin while generating slower incremental net interest income if balance-sheet growth, repricing and funding costs move differently.
Asset quality: HDFC still has the cleaner gross NPA number
HDFC Bank's gross NPA ratio of 1.17% remains lower than SBI's 1.47%.
That gives HDFC the edge on the simplest asset-quality comparison.
SBI's progress should not be understated. Its gross NPA ratio has fallen substantially from earlier credit cycles and improved again from 1.83% a year earlier.
The shift is one of the main reasons investors increasingly treat SBI as a profitable compounding bank rather than merely a recovery trade.
For both banks, future asset quality must be judged alongside the speed and composition of credit growth. Rapid loan expansion is attractive only if underwriting discipline survives the growth phase.
HDFC Bank's biggest financial advantage is capital
HDFC Bank's 19.6% capital adequacy ratio and 17.4% CET-1 ratio provide a substantial cushion for growth and unexpected losses.
This capital position is one of the strongest parts of the HDFC investment case.
A high CET-1 ratio gives a bank greater flexibility to absorb credit costs, grow risk-weighted assets and manage economic shocks without immediately raising fresh equity.
SBI is adequately capitalised, but HDFC's current reported capital ratios remain materially higher.
Profitability momentum currently favours SBI
SBI reported the larger absolute Q1 FY2027 profit and the faster reported year-on-year growth rate.
SBI's standalone net profit rose about 10.2% to approximately ₹21,121 crore.
HDFC Bank reported ₹19,060 crore of PAT, up 5% year on year.
HDFC's headline comparison is distorted by prior-year one-offs connected with the HDB Financial Services partial divestment and related items. The bank says adjusted PAT growth was approximately 9.8%.
Even after using the adjusted figure, SBI's current profit momentum is at least comparable and its NII growth is substantially stronger.
The ownership structures are completely different
SBI is government-controlled; HDFC Bank is professionally managed without an identified promoter.
The Government of India holds about 55.5% of SBI according to Bull Run's latest ownership snapshot.
HDFC Bank has no identified promoter after the merger with HDFC Limited.
Foreign institutional ownership is much higher in HDFC Bank at approximately 41.82%, compared with 11.41% for SBI.
Domestic institutional ownership is around 41.75% for HDFC Bank and 26.11% for SBI.
This difference affects stock-market behaviour. HDFC Bank is heavily owned by institutional portfolios, while SBI combines state control with public-market ownership.
What the share prices are saying in 2026
The market has dramatically preferred SBI over HDFC Bank during the latest one-year period.
| Market Metric | HDFC Bank | SBI |
|---|---|---|
| Price on 25 Aug 2026 | ₹727.50 | ₹1,048 |
| 1-month return | -2.06% | +0.34% |
| 3-month return | -4.11% | +8.29% |
| 6-month return | -19.04% | -13.35% |
| 1-year return | -25.92% | +28.36% |
| Distance from 52-week high | -28.71% | -15.12% |
| Distance from 52-week low | +0.99% | +31.25% |
| RSI (14) | Not populated in current Bull Run field | 60.0 |
The gap is striking. SBI is up more than 28% over one year in Bull Run's current data, while HDFC Bank is down nearly 26%.
This should not be interpreted as a forecast. It does tell us that the market currently assigns much more confidence to SBI's earnings trajectory.
Why HDFC Bank being near its 52-week low does not automatically make it cheap
Price weakness and valuation attractiveness are not the same thing.
HDFC Bank is trading only about 1% above its 52-week low in Bull Run's August 25 snapshot.
That can create a visually attractive chart, but the fundamental question is whether margins and earnings growth are recovering quickly enough.
For HDFC Bank, the re-rating case depends on the post-merger economics improving: deposit mobilisation, funding costs, NIM and profitable asset growth.
A stock can stay near its lows for a long time if the earnings expectations behind the old valuation no longer apply.
SBI's current strength is broader than stock momentum
SBI's one-year outperformance has fundamental support from profit growth, loan growth, NII growth and improving gross NPAs.
The bank is not merely benefiting from a short-term PSU trade.
Its latest June-quarter net profit exceeded ₹21,000 crore. Gross loans grew 18.63%. Net interest income rose nearly 15%. Gross NPAs fell to 1.47%.
The key risk is that loans are growing almost twice as fast as deposits. If funding competition intensifies, the current margin improvement could become harder to sustain.
Where HDFC Bank still has clear advantages
Franchise advantages
- Higher listed market capitalisation.
- Lower gross NPA ratio.
- 19.6% total capital adequacy.
- 17.4% CET-1 capital.
- Nearly 9,700 branches.
- Strong institutional ownership.
- Faster deposit growth than SBI.
- Higher absolute NIM in the latest comparison.
What HDFC needs to improve
- Margin recovery remains incomplete.
- Reported PAT growth is modest.
- NII growth trails SBI materially.
- Retail loan growth is slower than SME and wholesale growth.
- Share-price performance reflects weak investor confidence.
- Post-merger return economics still need to normalise.
Where SBI currently looks stronger
Operating advantages
- Larger deposit franchise.
- Larger loan book.
- Q1 FY27 PAT above ₹21,000 crore.
- Loan growth around 18.6%.
- NII growth near 15%.
- Improving gross NPA ratio.
- Positive one-year share-price return.
- Higher current Bull Run Score.
What SBI needs to watch
- Deposit growth is slower than loan growth.
- Capital ratios are lower than HDFC Bank's.
- Gross NPA ratio remains above HDFC's.
- Government ownership can influence strategic perception.
- Margin durability depends partly on funding costs and rate movements.
HDFC Bank vs SBI: which wins each category?
Balance-sheet scale: SBI.
Deposit base: SBI.
Loan-book size: SBI.
Loan-growth rate: SBI.
Deposit-growth rate: HDFC Bank.
Absolute current NIM: HDFC Bank.
NII growth: SBI.
Gross NPA ratio: HDFC Bank.
Capital adequacy: HDFC Bank.
Reported profit growth: SBI.
One-year market performance: SBI.
Institutional ownership depth: HDFC Bank.
HDFC Bank vs SBI FAQs
Which bank is bigger?
SBI is much bigger operationally by deposits and advances. HDFC Bank currently has the larger listed market capitalisation.
Which has the better NIM?
HDFC Bank's current absolute NIM is higher at 3.26% on total assets and 3.40% on interest-earning assets, while SBI's latest domestic NIM is around 3.0%.
Which bank is growing loans faster?
SBI, at approximately 18.63% year-on-year growth versus HDFC Bank at 15.4%.
Which has lower gross NPAs?
HDFC Bank, at 1.17% versus approximately 1.47% for SBI.
Which has stronger capital adequacy?
HDFC Bank, with total CAR of 19.6% and CET-1 of 17.4% at June 30, 2026.
Which stock performed better over one year?
SBI. Bull Run's August 25, 2026 snapshot shows SBI up about 28.4% over one year, compared with HDFC Bank down about 25.9%.
Does HDFC Bank have a promoter?
HDFC Bank reports no identified promoter following the merger with HDFC Limited.
Research sources
Disclaimer
This article is for educational and informational purposes only. Bank financial metrics are based primarily on Q1 FY2027 disclosures and Bull Run's market snapshot dated August 25, 2026. Banking ratios should not be interpreted like industrial-company ratios. Margins, NPAs, capital ratios, deposits, advances and market prices change over time. Nothing here is a recommendation to buy, sell or hold HDFC Bank, SBI or any other security. Bull Run is not a SEBI-registered Research Analyst or Investment Adviser.