IDFC First Bank reported a 73% year-on-year fall in standalone net profit to Rs 201 crore for the quarter ended September 2024 from Rs 751 crore a year earlier, mainly due to increased provisions for its microfinance business and a legacy toll account. 

Provisions tripled to Rs 1,732 crore from Rs 528 crore a year ago, including Rs 315 crore in the microfinance institution (MFI) business which has been witnessing industry-wide stress and Rs 253 crore in one Maharashtra-based toll account.

NII and NIM

The private lender’s net interest income (NII) grew 21% YoY to Rs 4,788 crore compared to Rs 3,950 crore in the year-ago period. 

Net interest margins (NIM) stood at 6.20% at the end of September versus 6.22% a quarter ago.

Bad loans 

Asset quality improved, as gross non-performing assets were 1.92 per cent as of September 30, 2024, against per cent as of September 30, 2023. The net NPA.68 per cent as of September 30, 2023.

The bank’s gross non-performing assets (NPA) ratio stood at 1.92% at the end of September, compared to 2.11% a year ago and 1.90% a quarter ago. 

Net NPA declined to 0.48%, from 0.68% a year ago and 0.59% a quarter ago.

In the September quarter, the early bucket collection efficiency in the retail book excluding microfinance remained stable at 99.5%, the bank said. In the microfinance book, collection efficiency reduced to 98.6% from 99.0% a quarter ago.

Operating profit

Core operating profit (excluding trading gain) grew 28% YoY to Rs 1,456 crore in Q2 FY24. Including trading gains, core operating profit grew 30% YoY.

Operating income grew 21% YoY to Rs 6,515 crore in Q2 FY25. Operating expenses rose 18% YoY to Rs 4,553 crore in Q2 FY25.

Deposits 

Customer deposits increased by 32.4% YoY to Rs 2.18 lakh crore as of 30 September 2024. Retail deposits grew 37.4% YoY to Rs 1.75 crore. CASA (current account savings account) deposits grew 37.5% to Rs 1.09 crore as of 30 September 2024.

CASA ratio was 48.9% at the end of September.

Loans

Loans and advances (including credit substitutes) increased by 21.5% YoY to Rs 2.23 lakh crore as of 30 September 2024. The retail book grew 25% YoY, while the corporate (non-infrastructure) loans rose 20% YoY. 

The bank’s legacy infrastructure book reduced by 21% on year and the microfinance portfolio as a percentage of overall loan book decreased to 5.6% from 6.3% a quarter ago.