IDFC First Bank Q3 results: Net profit rises 18% to Rs 716 crore, asset quality improves

IDFC First Bank Q3 FY24: IDFC First Bank on Saturday reported a net profit of Rs 715.68 crore for third quarter of the financial year (FY) 2023-24, which is 18 per cent more than Rs 605 crore recorded in Q3 FY23.

The bank's gross non-performing asset (NPA), which is the overall asset quality, stood at 2.04 per cent, down from 2.96 per cent recorded in Q3 FY23. The bank's net NPA for the quarter stood at 0.68 per cent, improving from 1.03 per cent on a year-on-year basis.

Its net interest income (NII) rose 30 per cent to Rs 4,287 crore in the third quarter, compared with Rs 3,286 crore in the same quarter of last year.

The bank's core operating income, which is NII plus fees, excluding trading gains, surged by 31 per cent from Rs 4,402 crore in the reporting quarter.

The net interest margins were at 6.42 per cent in the October-December quarter, as compared to 6.13 per cent in Q3FY23. Other income in the Q3 FY24 rose 32 per cent to Rs 1,469 crore as compared to Rs 1,117 crore in the last-year period. Retail fees constitute 93 per cent of the overall fees for the quarter Q3-FY24.

 The bank reported a pre-provision operating profit of Rs 1,515 crore in the October-December period, up 24 per cent year-on-year, compared with Rs 1,261 crore in the corresponding period of the previous fiscal.

Shares of IDFC First Bank closed at Rs 87.67 on BSE, up by 2.27 per cent, on January 20.

“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 per cent and 0.50 per cent respectively as of 31st December 2023,'' said V Vaidyanathan, Managing Director and CEO, IDFC FIRST Bank.

Its customer deposits rose by 43 per cent year-on-year to Rs 1.76 lakh crore at the end of the December quarter.

Its funded assets increased by 25 per cent year-on-year to Rs 1.89 lakh crore as of December 2023. The bank said it would scale down its infrastructure financing, which now constitutes only 1.6 per cent of total funded assets.

“We are happy to share that our deposits continue to grow strongly at 43 per cent YOY, and our CASA ratio continues to be strong at 46.8 per cent. Our asset quality continues to improve," Vaidyanathan added.

The bank's board in July 2023 approved the composite Scheme of Amalgamation of IDFC Financial Holding Company with IDFC Limited, and the amalgamation of IDFC Limited with IDFC First Bank.

The bank has received requisite approvals/ no objection letters from regulators, such as the Reserve Bank of India , Securities and Exchange Board of India, the Competition Commission of India, BSE Ltd and the National Stock Exchange of India Limited and other statutory and regulatory authorities, it said.

"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," added Vaidyanathan.

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