IDFC First Bank Q3 results: Profit more than doubles to Rs 605 cr on strong core operating income growth

Net Interest Income (NII) grew 27% year-on-year to Rs 3,285 crore for the quarter under review as against Rs 2,580 crore reported in the previous year period. The Bank’s provisions, though, increased 15% year-on-year to Rs 450 crore in Q3FY23.

“We are happy to state that we have now built a strong foundation for the bank with CASA ratio at 50% and strong retail deposit franchise contributing 77% of the overall customer deposits,” said V Vaidyanathan, Managing Director and CEO.

“The deposit franchise continues to grow strong at the bank based on our customer friendly products and services, excellent customer service, strong brand known for corporate governance, ethics and digital innovations. We are now confident of growing our loan book in a stable manner on this strong platform,” Vaidyanathan said.

Fee and Other income during the quarter rose 50% year-on-year to Rs 1,117 crore in the December quarter as against Rs 744 crore in Q3FY22. Retail fees constitute 91% of the overall fees for the quarter.

While the core operating income grew 32% year-on-year to Rs 4,402 crore, operating expenses rose at a slower pace than income growth at only 23% YoY, which resulted in improved operating leverage.

On the business side, customer deposits increased by 44% to Rs 1.23 trillion as of December 2022, while CASA Deposits grew by 39% to Rs 66,498 crore.Capital adequacy of the Bank was strong at 16.06% with CET-1 Ratio at 13.49% as on December 2022.

On the asset quality front, both gross non performing assets (NPAs) and net NPAs improved year-on-year to 2.96% and 1.03% respectively

“We are happy to share that our asset quality continues to remain strong. On the retail side, where our Bank particularly specializes in, the Gross NPA has come down to 1.87% and the Net NPA has come down to 0.70%, against the guidance of GNPA and Net NPA of 2.0% and 1.0% respectively,” Vaidyanathan said.