IDFC First Bank Q1 Results: Net Profit Surges 61.3%, NII Up 36%

Rajesh
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IDFC First Bank, a Mumbai-based private sector lender, reported robust financial results for the first quarter of the current financial year. The bank witnessed a substantial increase in net profit, aided by healthy growth in net interest income and improved asset quality. Let's delve into the details of the bank's Q1 performance.

IDFC FIRST BANK

Net Profit and Net Interest Income (NII) Growth:

In the first quarter of the current financial year, IDFC First Bank recorded an impressive 61.3 percent year-on-year (YoY) increase in net profit, reaching Rs 765.16 crore. The substantial growth was fueled by a surge in net interest income, which grew by 36 percent YoY to reach Rs 3,745 crore. The net interest margin also witnessed a positive trend, increasing by 56 basis points to 6.33 percent compared to the previous year.

Fee and Other Income:

The bank's fee and other income also contributed significantly to its overall growth, showing a remarkable YoY growth of 49 percent, amounting to Rs 1,341 crore. Core operating income, which includes net interest income and fees (excluding trading gains), rose by 39 percent to reach Rs 5,086 crore.

Improvement in Asset Quality:

IDFC First Bank demonstrated improved asset quality during the June quarter. The gross non-performing assets ratio (GNPA) declined to 2.17 percent, a considerable improvement compared to 3.36 percent in the year-ago period and 2.51 percent in the previous quarter. Additionally, the net NPA ratio (NNPA) also improved, standing at 0.70 percent, down from 1.3 percent in the same quarter of the previous year and 0.86 percent in Q4FY23.

Retail, Rural, and SME Finance NPAs:

The bank's efforts to reduce exposure to the infrastructure sector yielded positive results. Gross NPAs in retail, rural, and SME finance witnessed a decline to 1.53 percent, down from 2.12 percent in the year-ago quarter and 1.65 percent in the January-March period. The net NPAs in this segment also reduced to 0.52 percent, compared to 0.93 percent in the year-ago period and 0.55 percent in the previous quarter.

Deposits and Fundraising:

IDFC First Bank saw a substantial 44 percent YoY increase in customer deposits, reaching Rs 1.49 lakh crore in the June quarter. Retail deposits constituted a significant portion of total customer deposits, growing by 51 percent YoY to Rs 1.14 lakh crore. Current account saving accounts (CASA) deposits grew by 27 percent YoY to Rs 71,765 crore, while the CASA ratio declined to 46.5 percent, attributed to a shift from savings accounts to term deposits due to prevailing high interest rates.

Fundraising Plans:

The bank's board approved raising funds up to Rs 3,000 crore during a one-year period through the issuance of equity shares and/or other equity-linked securities. The funds will be raised through one or more permissible modes, including private placement, Qualified Institutions Placement, or a combination of these.

Conclusion:

IDFC First Bank's Q1 results showcase a remarkable performance with significant growth in net profit and net interest income. The bank's efforts to improve asset quality and its focus on retail deposits have contributed to its overall positive outlook. With the approval of fundraising plans, the bank remains well-positioned to further strengthen its financial position in the coming months.

Also Read: TCS Announces Senior Management Changes: Meet the New Appointees Driving Innovation and Growth

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