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Informist, Saturday, Oct. 18, 2025

 

--IDFC FIRST Bank reiterates NIM should be upwards of 5.8% by end of Mar qtr 
--CONTEXT: Comments by IDFC FIRST Bank mgmt in post-earnings analyst call 
--IDFC FIRST Bank: Need to mobilise deposits to fix credit-deposit ratio

 

By Sagar Sen and Pallavi Singhal

 

NEW DELHI – IDFC FIRST Bank is focusing on mobilising deposits and reducing borrowings to address credit-deposit ratio concerns, the management said on a post-earnings call with analysts. "We are still focusing on building our deposit franchise. We still have about 25,000 to 30,000 crores (INR 250 billion-INR 300 billion) of borrowings that we need to repay." the management said. 

 

At the end of the September quarter, the lender reported a credit-deposit ratio of 94.2%. This was as high as 137% at the time of the merger of IDFC Bank and Capital First in 2018 to form IDFC FIRST Bank.

 

"As a bank we are raising money for two purposes. One is to grow our loans by 20%. We need money for that. If our loan book is about INR 2.5 trillion, you need to grow the loan book by 50,000 crores (INR 500 billion). So, we need to raise 50,000 crores (INR 500 billion)... but it doesn't stop there. We also need to raise the money to pay off the bonds, which are still maturing. We are not replacing the money with fresh borrowings, because then our credit-deposit ratio will never get fixed," the management said.

 

Earlier in the day, the private-sector lender reported a net profit of INR 3.52 billion for Jul-Sept, up from INR 2.01 billion a year ago. This was lower than analysts' expectation of a net profit of INR 3.80 billion. On quarter, the bank's net profit was down 24%. Its total income was INR 118.28 billion, up from INR 106.84 billion a year ago. Sequentially, the total income was down 0.3%.

 

IDFC FIRST Bank's management reiterated that it expects net interest margin to be over 5.8% by the end of the financial year. "We expect margins to definitely improve in Q3 and Q4... by the end of Q4 the margin should be definitely upwards of 5.8%. We are also pencilling in one more repo cut when we are giving this guidance," the management said.

 

For the September quarter, the bank reported a net interest margin of 5.59%, which is 59 basis points lower than a year ago and 12 bps down on quarter. The shrinkage in the bank's net interest margin was in line with the trend in the rest of the industry due to the impact of the policy rate cuts, which are likely to have been fully passed on in the September quarter. The Reserve Bank of India's Monetary Policy Committee has cut the benchmark repo rate by 100 basis points since February. On Friday, shares of IDFC FIRST Bank had ended at INR 71.88 on the National Stock Exchange, up marginally over Thursday's close.  End

 

Edited by Rajeev Pai

 

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