IDFC First Bank Net Profit Surges 48%, Asset Quality Improves

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AuthorKavya Nair|Published at:
IDFC First Bank Net Profit Surges 48%, Asset Quality Improves
Overview

IDFC First Bank posted a robust 48.1% year-on-year net profit increase, reaching ₹503 crore in the third quarter. This surge was driven by higher net interest income, improved asset quality with gross NPAs falling to 1.69%, and strong business growth. Advances and deposits both grew over 21%, with CASA deposits climbing 33% to maintain a healthy ratio.

IDFC First Bank unveiled robust third-quarter results, showcasing a substantial 48.1% year-on-year surge in net profit to ₹503 crore. The financial institution's bottom line benefited from a potent combination of increased core income and enhanced asset quality.

Strong Income & Controlled Costs

Net interest income (NII) climbed 12% to ₹5,492 crore, bolstered by expanding balance sheets and stable margins. Other income contributed significantly, rising to ₹2,125 crore, largely fueled by a 15.5% boost in fee income and improved trading gains. Operating income saw a healthy 14% jump to ₹7,617 crore. Operating expenses increased by 13.4% to ₹5,584 crore, but this figure includes a one-time ₹65 crore impact from new labor codes, suggesting underlying cost control.

Asset Quality & Business Momentum

The bank demonstrated significant progress in asset quality, with gross non-performing assets (NPAs) declining to 1.69% from 1.94% a year prior. Provisions, while up 4.5% year-on-year, saw a sequential decrease of 3.7%, signaling stabilizing asset performance. Business growth remained a key strength, as advances surged 21.4% to ₹2.8 lakh crore, primarily driven by the retail and MSME segments. Deposits also showed strong momentum, growing 22.9% to ₹2.82 lakh crore, propelled by a 33% surge in CASA deposits to ₹1,50,350 crore, lifting the CASA ratio to a healthy 51.6%.

Capital Strength & Operational Efficiency

IDFC First Bank's capital adequacy ratio strengthened to 16.22% following the conversion of preference shares. For the first nine months of the fiscal year, the cost-to-income ratio improved to 71.8%, while return on equity stood at 4.11%. These metrics reflect the benefits of operating leverage as the bank's retail-focused franchise continues to scale effectively.

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