Business Wire India
Financial results at a glance
The Board of Directors of IDFC FIRST Bank, in its meeting held today, approved the unaudited financial results for the quarter and nine months ended December 31, 2023.
Profitability
- Net Profit grew 18% YOY from Rs. 605 crore in Q3-FY23 to Rs. 716 crore in Q3-FY24.
- Net Interest Income (NII) grew 30% YOY from Rs. 3,285 crore in Q3-FY23 to Rs. 4,287 crore in Q3-FY24.
- Net interest Margin (gross of IBPC and sell-down) was 6.42% in Q3-FY24 as compared to 6.13% in Q3-FY23 and 6.32% in Q2-FY24.
- Fee and Other Income grew by 32% YoY from Rs. 1,117 crore in Q3-FY23 to Rs. 1,469 crore in Q3-FY24. Retail fees constitute 93% of the overall fees for the quarter Q3-FY24.
- Core Operating income (NII plus Fees, excluding trading gains) grew 31% from Rs. 4,402 crore in Q3-FY23 to Rs. 5,755 crore in Q3-FY24.
- Operating Expense grew by 33% YoY from Rs. 3,177 crore in Q3-FY23 to Rs. 4,241 crore in Q3-FY24.
- Core Operating Profit (pre provision operating profit excluding trading gains) grew by 24% YOY from Rs. 1,225 crore in Q3-FY23 to Rs. 1,515 crore for Q3-FY24.
- Provisions increased 45% YOY from Rs. 450 crore in Q3-FY23 to Rs. 655 crore in Q3-FY24. The credit cost (quarterly annualized) as % of average funded assets for 9M-FY24 was 1.26%.
- RoA (annualized) stood at 1.16% for 9M-FY24.
- RoE (annualized) stood at 10.67% in 9M-FY24.
Deposits & Borrowings
- Customer Deposits increased by 42.8% YoY from Rs. 1,23,578 crore as of December 31, 2022 to Rs. 1,76,481 crore as of December 31, 2023.
- CASA Deposits grew by 28.6% YoY from Rs. 66,498 crores as of December 31, 2022 to Rs. 85,492 crore as of December 31, 2023. CASA Ratio stood at 46.8% as of December 31, 2023.
- Retail deposits grew by 46.6% YoY from Rs. 95,107 crores as of December 31, 2022 to Rs. 1,39,431 crore as of December 31, 2023.
- Retail deposits constitutes 79% of total customer deposits as of December 31, 2023.
- Legacy High Cost Borrowings reduced from Rs. 18,762 crores as of December 31, 2022 to Rs. 13,607 crore as of December 31, 2023.
Funded Assets
- Funded assets (including advances & credit substitutes) increased by 24.5% YoY from Rs. 1,52,152 crore as of December 31, 2022 to Rs. 1,89,475 crores as of December 31, 2023.
- The Bank continues to wind down infrastructure financing as per the stated strategy and now constitutes only 1.6% of total funded assets as of December 31, 2023.
- Exposure to top 20 single borrowers improved to 5.93% as of December 31, 2023.
- The Credit to Deposit Ratio improved further from 109.18% as of December 31, 2022 to 101.41% crore as of December 31, 2023. The incremental Credit to Deposit ratio for quarter 9M-FY24 was 79.89%.
Assets Quality
Assets Quality
- Gross NPA (GNPA) of the bank has improved to 2.04% as of December 31, 2023 from 2.96% of December 31, 2022.
- Net NPA (NNPA) of the bank has improved to 0.68% as of December 31, 2023 from 1.03% of December 31, 2022.
- GNPA of the Retail, Rural and SME Finance has improved to 1.45% as of December 31, 2023 from 1.87% of December 31, 2022.
- NNPA of the Retail, Rural and SME Finance has improved to 0.51% as of December 31, 2023 from 0.70% of December 31, 2022.
- Excluding the infrastructure financing book which the Bank is running down, the GNPA and NNPA of the Bank would have been 1.66% and 0.47% respectively as of December 31, 2023.
- SMA-1 and SMA-2 (31-90 DPD which is the pre-NPA stage) in Retail, Rural and SME Finance portfolio has reduced from 0.87% as of March 31, 2023, to 0.85% as of December 31, 2023.
- Collection efficiency for urban retail business (excluding prepayments and EMI arrears) in current bucket continues to remain high at 99.6%.
- Provision coverage ratio (including technical write-off) of the bank has increased to 84.68% as of December 31, 2023 from 76.60% as of December 31, 2022.
- Standard restructured book as % of total funded assets improved to 0.35% at December 31, 2023.
Capital Position & Liquidity
- Capital Adequacy of the Bank was strong at 16.73% with CET-1 Ratio at 13.95% as on December 31, 2023. The Bank raised fresh equity capital of Rs. 3,000 crore in 1st week of October 2023.
- Average LCR was strong at 121% for the quarter ending on December 31, 2023.
Guidance 2.0 for the next 5 Years (FY2024 to FY 2029)
- The Bank has exceeded, met, or is most likely to meet most targets as provided under Guidance 1.0.
- We have a strong proven business model that is incrementally very profitable. Basis this model, we could do necessary investments and expenses for building the Bank, and yet grow profitability during FY 19-24. We have far greater visibility while providing Guidance 2.0 as compared to visibility of at time of Guidance 1.0
- We are building a world class bank with highest levels of corporate governance, a consistent balance sheet growth of ~20%, with strong asset quality of GNPA < 1.5% and net NPA of < 0.4%, with ROE of 17-18%, with contemporary technology, unique business model, and high levels of Customer Centricity.
Guidance 2.0 (FY 24-29) is as follows:
| Particulars | 31-Dec-18 | 31-Dec-23 | 31-Mar-29 | Assumptions |
| Deposits | ||||
| Branches (#) | 206 | 897 | 1700-1800 | Will open based on requirements to meet Deposit Goals |
| Customer Deposits (Rs Cr) | 38,455 | 1,76,481 | 5,85,000 | Guidance 2.0 at 5Y CAGR of 24.8% vs current YoY growth rate of 42.8% |
| – CASA Deposits (Rs Cr) | 5,274 | 85,492 | 2,85,000 | Guidance 2.0 at 5Y CAGR of 24.5% vs current YoY growth rate of 28.6% |
| – Term Deposits (Rs Cr) | 33,181 | 90,990 | 3,00,000 | Guidance 2.0 at 5Y CAGR of 25.2% vs current YoY growth rate of 59.4% |
| Assets | ||||
| Loans & Advances (Rs Cr) | 1,04,660 | 1,89,475 | 5,00,000 | Guidance 2.0 at 5Y CAGR of 20.3% vs current YoY growth rate of 24.5% |
| Total Assets (Rs Cr) | 1,56,916 | 2,70,738 | 7,00,000 | Guidance 2.0 at 5Y CAGR of 19.8% vs current YoY growth rate of 22.3% |
| Asset quality | ||||
| GNPA % | 1.97% | 2.04% | 1.50% | Currently, GNPA is 1.66% as of 31-Dec-23 excluding Infra loans |
| NNPA % | 0.95% | 0.68% | 0.40% | Currently, NNPA is 0.47% as of 31-Dec-23 excluding infra loans |
| Profitability | ||||
| Profit (Rs Cr) | -1,538* | 2,232** | 12,000 – 13,000 | At about 1.9-2% of estimated ROA of FY29 |
| ROA % | – | 1.2% | 1.9-2.0% | IDFC FIRST Business model naturally geared for 2% ROA |
| ROE % | – | 10.7% | 17-18% | IDFC FIRST Business model naturally geared for 18% ROE |
* No. is for Q3-19, ** No. is for 9M-24
Comments from Managing Director & CEO
Mr. V Vaidyanathan, Managing Director and CEO, IDFC FIRST Bank, said,
“We are happy to share that our deposits continue to grow strongly at 43% YOY, and our CASA ratio continues to be strong at 46.8%. Our asset quality continues to improve. On the Retail, Rural & SME business, which is a significant part of our business, the Gross NPA and Net NPA continue to remain low and are at 1.45% and 0.50% respectively as of 31st December 2023. We will remain very watchful on this front all the time.
We have registered profit of Rs. 2,232 crores in 9M-FY24, representing a growth of 37% over PAT of Rs. 1,635 crores in 9M-FY23.
At the time of the merger of IDFC Bank and Capital First, the Bank provided Guidance 1.0. As of 31st December 2023, IDFC FIRST Bank has completed exactly 5 years post the merger and hence we are providing Guidance 2.0 (FY 24-29), with greater visibility as compared to the visibility we had at time of providing Guidance 1.0. We are likely to meet most targets under Guidance 1.0.”
