The financial year ending 31 March 2023 has been a defining year for IDFC First Bank. The private lender posted record quarterly and yearly profit while diversifying its deposit and loan book profile.

The private lender, riding on a high-growth path, more than doubled its fiscal fourth-quarter net profit to Rs 803 crore from Rs 343 crore a year ago. This was 134% higher than the earlier-year quarter and 32.7% over the previous quarter.

In FY23, net profit jumped to Rs 2,437 crore versus a paltry Rs 145 crore a year ago.

"We have registered our highest ever quarterly profit in Q4 FY23 and highest ever yearly profit in FY23," said IDFC First Bank managing director and CEO V Vaidyanathan.

Net interest income (NII) grew 35% year-on-year to Rs 3,597 crore in the fourth quarter ended 31 March 2023 from Rs 2,669 crore in the earlier-year quarter.

For the full-fiscal ended March 2023, NII rose 30% YoY to Rs 12,635 crore from Rs 9,706 crore in FY22.

“We have built a strong foundation for the bank with diversified customer deposits and diversified loan book," said Vaidyanathan.

As of 31 March 2023, the bank's customer deposits jumped 47% to Rs 1,36,812 crore versus Rs 93,214 crore a year ago. The CASA ratio recorded a growth of 133 bps at 49.77%.

Loans and advances rose 24% to Rs 1,60,599 crore as of 31 March 2023, as against Rs 1,29,051 crore in the year-ago period.

The asset quality of the bank improved, with gross non-performing assets (NPAs) declining to 2.51% from 2.96% sequentially and 3.70% in Q4 FY22. 

Net NPA improved to 0.86% by the end of Q4FY23, from 1.03% in the preceding quarter and 1.53% in the same period a year ago.

“The asset quality remains high. On the retail side, the gross NPA is 1.65% and the net NPA is at 0.55% as against the guidance of 2% and less than 1%, respectively. If we exclude the infrastructure financing book, which is anyway in run-down mode, the gross NPA and net NPA would be 1.84% and 0.46% at the overall bank level," said Vaidyanathan.

For the full financial year FY23, provisions declined by 46% YoY to Rs 1,665 crore. Provision coverage ratio (PCR) was up 1000 bps at 80.29%.

Credit cost for FY23 came in at 1.16% against the guidance of 1.5%. ROA improved to 1.13% in FY23 from 0.08% a year ago while ROE improved to 10.95% from 0.75% in FY22.

“Now the bank is firmly into profits and can deliver strong financial performance from here on,” said Vaidyanathan. 

Meanwhile, IDFC First Bank's board members approved to raise Rs 5,000 crore through debt securities issuance, in one or more tranches.