Earnings Review
IDFC FIRST Bank Q2 PAT jumps YoY on low base, lower provisions
This story was originally published at 20:49 IST on 18 October 2025
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--IDFC FIRST Bank Jul-Sept net profit INR 3.52 bln
--Analysts saw IDFC FIRST Bank Jul-Sept net profit at INR 3.80 bln
--IDFC FIRST Bank Jul-Sept net profit INR 3.52 bln vs INR 2.01 bln year ago
--IDFC FIRST Bank Q2 total income INR 118.28 bln vs INR 106.84 bln yr ago
--IDFC FIRST Bank Jul-Sept provisions INR 14.52 bln vs INR 17.32 bln year ago
--IDFC FIRST Bank Apr-Sept net profit INR 8.15 bln vs INR 8.81 bln year ago
--IDFC FIRST Bk Apr-Sept total income INR 236.97 bln vs INR 210.92 bln yr ago
--IDFC FIRST Bk gross NPAs 1.86% on Sept 30 vs 1.97% qtr ago, 1.92% yr ago
--IDFC FIRST Bk net NPA 0.52% as on Sept 30 vs 0.55% qtr ago, 0.48% yr ago
--IDFC FIRST Bank Basel-III capital adequacy ratio 14.11% as on Sept 30
--IDFC FIRST Bank Jul-Sept net interest margin 5.59% vs 5.71% qtr ago
--IDFC FIRST Bank: CASA ratio 50.07% as on Sept 30 vs 47.99% qtr ago
--IDFC FIRST Bank Jul-Sept cost of funds 6.23% vs 6.42% qtr ago
--IDFC FIRST Bank: Loans, advances INR 2.67 tln as on Sept 30, up 19.7% on yr
--IDFC FIRST Bank: Expect cost of funds to drop going forward
By Cassandra Carvalho
MUMBAI – IDFC FIRST Bank reported a 76% on-year jump in its net profit for the quarter ended September, on the back of a low base and due to a near 11% rise in total income and 16?ll in provisions. However, the bank missed the Street's estimates. As expected, its net profit fell sequentially because of high credit cost.
The private sector bank reported a net profit of INR 3.52 billion for Jul-Sept, up from INR 2.01 billion in the year ago period. Analysts expected the bank to report a net profit of INR 3.80 billion. On quarter, its net profit was down 24%. The bank's total income was INR 118.28 billion, up from INR 106.84 billion a year ago. Sequentially, the total income was down 0.3%.
Provisions and contingencies for the quarter fell to INR 14.52 billion from INR 17.32 billion a year ago. Sequentially, the provisions fell 12.5% from INR 16.59 billion, primarily due to lower provisions in its microfinance book, it said in a press release.
As for its microfinance book, the portfolio size fell by 41.6% on year, the bank said. Over the past year, the bank's provisions had shot up due to systemic stress in the microfinance sector. As of Sept. 30, the book constituted 2.7% of funded assets against 5.6% a year ago, the release said. The bank used a microfinance provision buffer of INR 750 million in Jul-Sept due to "reduced stress in microfinance institutions," and continues to carry the balance INR 2.40 billion as contingent provisions, it said.
The bank's credit cost, excluding its microfinance portfolio, was 2.03% in Apr-Sept, it said in its investor presentation.
On the business front, the bank's loans and advances grew 19.7% on year to INR 2.67 trillion. Customer deposits grew 23.4% on year to INR 2.69 trillion. Its current account savings account deposits rose 26.8% on year to INR 1.39 trillion, increasing its current account savings account ratio by 119 basis points on year to 50.07%. As of Sept. 30, mortgage-backed loans made up 29% of the bank's loan book, followed by other retail loans at 25%, and wholesale loans at 20%. Vehicle loans made up 11%, loans to micro, small and medium enterprises made up 9%, and rural loans made up 6% of its book.
Retail deposits of the bank rose 21.4% on year to INR 375.70 billion and 4.2% sequentially. The bank said it is the strategic priority of the lender to increase retail deposits due to the stable nature of these deposits over bulk deposits. As of Sept. 30, retail deposits consisted of 79% of the bank's total customer deposits, with the remaining 21% consisting of wholesale deposits.
The bank's gross non-performing assets rose 15.4% on year to INR 48.41 billion, but fell 0.55% sequentially. Its net non-performing assets rose 29.7% to INR 13.45 billion, but were largely flat sequentially. The bank's gross non-performing asset ratio as of Sept. 30 was 1.86%, down from 1.97% a quarter ago and 1.92% a year ago. The lender's net non-performing asset ratio was 0.52%, down from 0.55% a quarter ago and up from 0.48% a year ago.
The bank's cost of funds fell 19 bps on quarter to 6.23%. The bank expects cost of funds to fall going forward, V. Vaidyanathan, managing director and chief executive officer of the bank, said in the press release.
Shareholders' funds in the bank rose 26% on year to INR 464.90 billion, the bank's investor presentation said. In the September quarter, the bank had raised INR 75 billion from two marquee investors--Currant Sea Investments B.V., an affiliate of Warburg Pincus, and Platinum Invictus. On Friday, shares of the bank ended flat at INR 71.88 on the National Stock Exchange. End
Edited by Ashish Shirke
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