IDFC First Bank Q1 Results: Net profit drops 11% to ₹680.7 crore, NII up 25% YoY; Asset quality stable

IDFC First Bank Q1 Results: IDFC First Bank announced its announced its April-June quarter results for fiscal 2024-25 (Q1FY25) on Saturday, July 27, reporting a drop of 11 per cent in net profit at ₹680.7 crore, compared to ₹765.2 crore in the corresponding period last year. The bank's profit was impacted by increased provisions in JLG business due to floods in Tamil Nadu.

The private sector bank was formed by the merger of the banking arm of Infrastructure Development Finance Company (IDFC) and Capital First. The net interest income (NII)—the difference between interest earned and paid—rose 25.4 per cent to ₹4,695 crore in the first quarter of the current fiscal year, compared to ₹3,745 crore in the year-ago period.

Also Read: IDFC First Bank Q1FY25 results today: PAT, deposits to grow on improved CASA

IDFC First Bank Q1 Results - Key Metrics

The bank's interest income jumped 28 per cent to ₹8,789 crore. In the June quarter, IDFC First Bank's Gross Non-Performing Assets (GNPA) recorded a drop of 1.9 per cent, while the net NPA rose by one bps to 0.59 per cent year-on-year (YoY). The bank reported a 25.5 per cent increase in pre-provisioning operating profit to ₹1,882 crore as against ₹1,500 crore in the year-ago period.

Total deposits of the bank increased by 35.8 per cent YOY from Rs. 1,54,427 crore as of June 30, 2023 to Rs. 2,09,666 crore as of June 30, 2024. The net interest margin (gross of IBPC and sell-down) reduced from 6.33 per cent in the June quarter of FY24 to 6.22 per cent in Q1 FY25.

V Vaidyanathan, Managing Director and CEO of IDFC First Bank, said, “The biggest requirement in banking today is the ability to raise deposits. On this front, we continue to get strong growth in deposits based on top-quality service levels, a top-in-class mobile app, and excellent corporate governance. Our CASA ratio is sustained at 46.6 per cent. Our customer deposits have grown 38 per cent YoY."

Also Read: LIC raises stake in IDFC First Bank to 2.68% at ₹80.63/share via private placement offer

‘’Overall gross NPA was stable at 1.90 per cent and net NPA was 0.59 per cent. Provisions normalized this quarter in line with the industry. We made extra provisions for MFI business because of massive floods in Tamil Nadu and seasonality. We expect credit cost to normalise in H2 FY25 as guided earlier,'' said Vaidyanathan.

‘’'On the profitability front, the core operating profit (income less Oopex) rose 31 per cent YoY excluding trading gains. This continues on the back of strong core operating profit in FY24, which was up 31 per cent from Rs. 4,607 crore in FY23 to Rs. 6,030 crore in FY24,'' he added.

IDFC First Bank said that its provisions increased 109 per cent YoY from Rs. 476 crore in Q1 FY24 to Rs. 994 crore in Q1 FY25. This was primarily due to a rise in provisions in the JLG portfolio, which was impacted by the flood in Tamil Nadu and seasonal effects.

Earlier this month, IDFC First Bank raised ₹3,200 crore by selling equity shares to six insurance companies, including LIC and HDFC Life. In a regulatory filing to the stock exchanges, IDFC First Bank said that an authorised committee of the board of directors approved the allotment of more than 39.68 crore shares for ₹80.63 per scrip, "aggregating to ₹3,200 crore".

The companies allotted shares are Life Insurance Corporation of India (LIC), HDFC Life Insurance Company, Aditya Birla Sun Life Insurance Company, Bajaj Allianz Life Insurance Company, ICICI Lombard General Insurance Company and SBI General Insurance Company. On Friday, shares of IDFC First Bank settled 0.19 per cent lower at ₹74.51 apiece on the BSE.