IDFC First Bank on Saturday posted its fiscal first quarter profit, on a standalone basis, at Rs 765 crore, up 61 per cent in comparison to Rs 474 crore in Q1FY23, in line with the estimates. The profit growth was driven by strong growth in core operating income. According to CNBC TV18 estimates, the bank was expected to post Q1 profit at Rs 761.9 crore and NII at Rs 3756.5 crore. The first quarter NII stood at Rs 3745 crore, up 36 per cent YoY.
Net interest Margin (gross of IBPC and selldown) was 6.33 per cent in Q1FY24 as compared to 5.77 per cent in Q1FY23. Fee and other income grew by 49 per cent YoY to Rs 1341 crore in Q1FY24. Core operating income (NII plus fees, excluding trading gains) grew 39 per cent from Rs 3650 crore in Q1FY23 to Rs 5086 crore in Q1FY24. Operating expenses, meanwhile, increased by 37 per cent on-year to Rs 3659 crore primarily on account of employee increments, branch expansion and increase in business volumes.
Meanwhile, on a consolidated basis, IDFC First Bank posted its Q1 profit at Rs 731.51 crore, up 50.8 per cent on-year, as against Rs 485.01 crore during Q1FY23. The total interest earned during the quarter was at Rs 6868.86 crore, up 39.6 per cent from Rs 4921.74 crore during the first quarter of financial year 2022-23. While the total income during the quarter in review was at Rs 8232.47 crore, total expenditure during Q1FY24 stood at Rs 6760.08 crore.
Deposits and borrowings at IDFC First Bank
During the quarter, customer deposits increased by 44 per cent on-year to Rs 1,48,474 crore. CASA deposits grew by 27 per cent YoY to Rs 71,765 crore. CASA ratio reduced to 46.5 per cent during the quarter ended June 2023, due to shift from savings accounts to term deposits due to prevailing interest rates. Retail deposits grew by 51 per cent YoY to Rs 1,14,272 crore as on June 30, 2023. Legacy high cost borrowings reduced to Rs 16,055 crore during Q1FY24 from Rs 22,406 crore a year ago.
“We continue to build a strong franchise with a high CASA Ratio of 46.5 per cent. Our retail deposits are growing well, based on our strong positive brand, ethics, customer-friendly products and digital innovations,” said V Vaidyanathan, Managing Director and CEO, IDFC FIRST Bank.
IDFC First Bank’s asset quality
The gross NPA of the bank improved to 2.17 per cent as of 30 June 2023 from 3.36 per cent a year ago. Net NPA of the bank has improved to 0.70 per cent during the quarter ended June 2023 from 1.30 per cent during Q1FY23. “GNPA of retail, rural and SME finance has improved to 1.53 per cent as of 30 June 2023 from 2.12 per cent of 30 June 2022,” it said. The bank added that the collection efficiency for urban retail business (excluding prepayments and EMI arrears) in the current bucket continues to remain high at 99.5 per cent. Further, provision coverage ratio of the bank has increased to 83.12 per cent from 73.13 per cent a year earlier.
“We are happy to share that our asset quality continues to remain strong. On the retail, rural and SME business, where our Bank particularly specializes in, the Gross NPA has come down to as low as 1.53 per cent and the Net NPA has come down to 0.52 per cent,” said V Vaidyanathan.
“During the last four years, we underwent some transformational changes at our Bank. During the period, we got terrific support from all of our shareholders and customers, and we thank you all for the same. We are confident of improving our performance from here on,” he concluded.