IDFC First Bank on Saturday reported a 58% year-on-year decline in net profit to Rs 304 crore for the fourth quarter of FY25, impacted by a sharp rise in bad loans within its microfinance portfolio. The profit missed market expectations, as analysts polled by Bloomberg had projected a net profit of Rs 421 crore for the quarter.
Gross slippages from the microfinance business rose significantly, increasing from Rs 437 crore in Q3 FY25 to Rs 572 crore in Q4 FY25.
Net interest income — the difference between interest earned and interest paid — grew 10% year-on-year to Rs 4,907 crore during the quarter, up from Rs 4,469 crore in Q4 FY24.
“Our funded asset book grew by 20.4%. Importantly, the Bank’s asset quality remains resilient, with GNPA and NNPA at 1.87% and 0.53% respectively,” said V Vaidyanathan, managing director and CEO, IDFC First Bank. “We continue to be committed to grow responsibly, serve high-quality products and services, lead with innovation and build customer-centric propositions.”
However, the bank’s net interest margin (NIM) narrowed to 5.95% in Q4 from 6.04% in the previous quarter.
Overall gross slippages for the bank stood at Rs 2,175 crore during Q4 FY25, marginally down from Rs 2,192 crore in Q3 FY25.
Customer deposits rose 25.2% year-on-year, reaching Rs 2.42 lakh crore as of March 31, compared to Rs 1.93 lakh crore a year earlier.
The bank’s loans and advances also expanded by 20.4%, growing from Rs 2.01 lakh crore as of March 31, 2024 to Rs 2.41 lakh crore as of March 31, 2025. The retail, rural, and MSME book grew 18.6% year-on-year to Rs 1.97 lakh crore.
Meanwhile, the microfinance portfolio shrank by 28.3% year-on-year, with its share of the overall loan book reducing from 6.6% in March 2024 to 4% in March 2025.
Considering the increase in delinquency of the micro finance business across the industry, the bank is tracking the microfinance business closely. The asset quality indicators, including gross NPA, net NPA, SMA, and Provisions of the book excluding MFI is stable, said the bank.