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IDFC First Bank Q1 Results: 61% YoY increase in profit

Jul 31, 2023

By: BlinkX Research Team

Despite increased provisions, the private sector lender reported a 61% YoY increase in profit for the June quarter at Rs 765 crore since core operational income growth remained strong. On July 29, the bank reported its profits. Comparing the current quarter to the same period last year, net interest income increased 36% to Rs 3,745 crore, and the net interest margin increased to 6.33% from 5.77%.

As a percentage of the total loans, gross non-performing assets (GNPAs) were 2.17%, down from 3.36% in the same time last year and 2.51% in the prior quarter. The net NPA ratio was 0.70%, down from 0.86% in Q4FY23 and 1.3% in the same period the year before. Gross (NPAs) decreased to Rs 3,603.38 in absolute terms from Rs 3,884.45 in the March quarter and Rs 4,354.75 in the same quarter last year, according to the bank.

Net NPAs was Rs 1,149.03 crore, down from Rs 1,653.82 crore in the same period last year. Gross NPAs in retail, rural, and SME lending decreased from 2.12% in the same quarter a year earlier and 1.65% in the period from January to March to 1.53%. In comparison to the same period a year ago and the prior quarter, net NPAs decreased from 0.55% to 0.52%.

Urban retail businesses continue to have strong collection efficiency at 99.5%. The provision coverage ratio increased from 73.13% to 83.12% over the same time last year. The amount that a bank must set aside for covering losses on a loan account is referred to as the provision. The needed provisions will equal the full loan amount if an account becomes NPA. ​

In the June quarter, customer deposits were Rs 1.49 lakh crore, up 44% YoY. Retail deposits made up 77% of all customer deposits and increased by 51% YoY to Rs 1.14 lakh crore. Deposits in current account savings accounts (CASAs) increased by 27% YoY to Rs 71,765 crore. The CASA ratio was 46.5%, down from 50% in the same period last year. This followed a switch from savings accounts to term deposits because of the high interest rates that were in effect at the time.

The board approved to raise up to Rs 3,000 crore in one year. According to the bank, the funds will be raised by issuing equity shares and/or other equity-linked securities in one or more tranches using any permissible method, including but not limited to a private placement, a qualified institutions placement, or a combination of these.

Source: Media Reports