IDFC FIRST Bank Q2 FY25 Earnings: 32.4% Deposit Growth, 21% NII Rise, 73% Profit Dip

IDFC FIRST Bank released its financial results for the July-September quarter of fiscal year 2024-25 (Q2 FY25 Earnings) on October 26, 2024. IDFC FIRST Bank reported a significant increase in its Q2 FY25 customer deposits, growing 32.4% year-on-year (YoY) to ₹2,18,026 crore. Retail deposits rose by 37.4% to ₹1,75,300 crore, driven by increased customer trust and focus on growth in the retail sector. 

CASA deposits, which represent low-cost funds, increased by 37.5% YoY to ₹1,09,292 crore, achieving a CASA ratio of 48.9%. Loans and advances also expanded by 21.5% YoY, reaching ₹2,22,613 crore, with the retail loan book rising by 25%. The bank successfully reduced its legacy infrastructure loan book by 21% YoY to ₹2,654 crore.

Improvement in Asset Quality

The bank maintained solid asset quality with gross and net NPAs at 1.92% and 0.48%, respectively, demonstrating prudent credit management and a focus on improving financial health across segments.

Increase in Net Interest Income and Fee Income

IDFC FIRST Bank’s Net Interest Income (NII) rose by 21% YoY to ₹4,788 crore, supported by an 18% growth in fee and other income, which reached ₹1,622 crore. This boost reflects the bank’s effective management of interest margins and steady growth in non-interest revenue streams.

Impact of Higher Provisions on Profitability

Despite the rise in income, net profit saw a decline due to increased provisions in the microfinance segment and for a legacy toll account, reducing profit after tax by 73% YoY to ₹201 crore. Adjusted for these provisions, the bank’s profit after tax would have been approximately ₹626 crore, highlighting its underlying profitability.

Capital Strengthening Initiatives

The bank’s total CRAR (Capital to Risk Weighted Assets Ratio) stood at 16.60%, with CET-1 at 14.08%, reflecting a solid capital base. This strength was further bolstered by an equity capital infusion of ₹3,200 crore in July 2024 and the completion of the merger with IDFC Ltd in October 2024.

Leadership in FASTag and Credit Card Segments

IDFC FIRST Bank leads the FASTag market with over 20 million tags issued. It has also crossed the 3 million mark for issued credit cards, with improved cost efficiency contributing to sustainable growth in this segment.

About IDFC FIRST Bank

IDFC FIRST Bank provides banking services and was established on December 18, 2018, through the merger of the former IDFC Bank and Capital First. Today, the bank has 897 branches and 1,136 ATMs across India.

On October 28, 2024, IDFC FIRST Bank Ltd’s share price opened at ₹61.01, touching the day’s low at ₹59.30, as of 10:03 PM on the NSE.

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