The earnings were impacted by what the company called “discretionary provisions” of Rs 568 crore including Rs 315 crore in the MFI business (stress in the MFI industry) and Rs 253 crore in one Maharashtra-based toll account.
Savings & loans
IDFC First Bank customer deposits grew 32.4% YoY from Rs 1,64,726 crore as on 30 September 2023 to Rs 2,18,026 crore as on 30 September 2024. Retail deposits grew 37.4% YoY from Rs 1.27 crore as on 30 September 2024 2023 to Rs 1,75,300 crore as on September 30, 2024.
ETMarkets.comCASA deposits grew by 37.5% YoY from Rs 79,468 crore as on September 30, 2023 to Rs. 1,09,292 crore as on 30 September 2024. CASA ratio stood at 48.9% as on 30 September 2024. Retail deposits were 80.4% of total customer deposits as on 30 September 2024. Cost of funds for the bank was 6.46% in Q2 -FY25, which has improved significantly from the last quarter. Excluding costly legacy debt, cost of funds stood at 6.37% in Q2-FY25.Loans & advances
Loans & funds including credit substitution grew by 21.5% YoY from Rs 1,83,236 crore as on September 30, 2023 to Rs 2,22,613 crore as on September 30, 2024. The bank’s retail book grew by 25% YoY while corporate (non-infrastructure) loans rose 20% YoY during the quarter.
The bank’s legacy infrastructure book declined by 21% YoY to Rs 2,654 crore as on September 30, 2024, 1.2% of the bank’s total funded assets.
The microfinance portfolio as a percentage of the overall loan book decreased from 6.3% in Jun-2024 to 5.6% in Sep-2024.
Asset Quality
Gross NPA was reported at 1.92% as on 30 September 2024, against 2.11% as on 30 September 2023. Whereas, net NPA stood at 0.48% as on 30 September 2024, against 0.68% as on 30 September 2023. .
The bank’s PCR increased to 75.27% on September 30, 2024 from 68.18% on September 30, 2023 and 69.38% on June 30, 2024.
Fees and other income grew by 18% YoY from Rs 1,376 crore in Q2FY24 to Rs 1,622 crore in Q2 FY25. Operating income grew by 21% from Rs 5,380 crore in Q2FY24 to Rs 6,515 crore in Q2 FY25. Operating expenses increased by 18% YoY from Rs 3,870 crore in Q2 FY24 to Rs 4,553 crore in Q2 FY25.
Capital Position
• Bank successfully raised Rs. 3,200 crore of fresh equity capital from marquee domestic institutional investors by July 2024.
• The bank also successfully completed its merger with IDFC Ltd in October 2024, which added capital of Rs 618 crore to its net-worth, while the number of outstanding shares was reduced by 16.64 crore.
• Including the profit for Q2-FY25 and posting the impact of the merger as mentioned above, the total CRAR on September 30, 2024 will be 16.60% with a CET-1 ratio of 14.08%.
Commenting on the earnings, V Vaidyanathan, MD & CEO said that the company’s core drivers remain strong while its brand, technology and high level of service are able to increase deposits. “The ability to grow deposits is the main strategic strength of the Bank. Deposits grew healthy at 32% YoY. Overall loan growth was stable at 21.5% on a YoY basis. We see the impact on the microfinance business as seen in other industries. January 2024, MFI payments insured with CGFMU 50% of the book is now insured and it is expected to reach 75% by the end of March 2025,” said Vaidyanathan.
“We have made an additional provisioning buffer of Rs 315 crore for the microfinance segment as a prudent measure. The bank has taken an additional provision of Rs 253 crore for one toll road related to the entry point of Mumbai which is affected due to the State government waiving toll on LMV. The bank will recognize again as profit depends on toll collection and government compensation to clients,” he said.
“The performance of our core operations is strong, we are confident that we will be able to return to profitability,” said the MD & CEO.
