IDFC First Bank Q2: Net Profit Jumps 35% On Robust Growth In Deposits

It logged a net profit of Rs 751 crore for the September quarter in the current financial year (FY24) against a net profit of Rs 556 crore in the second quarter of the previous fiscal year (FY23).

IDFC First Bank posted a 35 per cent increase in its net profit after tax on a year-on-year (YoY) basis in its second quarter (Q2) earnings on Saturday via an exchange filing. It logged a net profit of Rs 751 crore for the September quarter in the current financial year (FY24) against a net profit of Rs 556 crore in the second quarter of the previous fiscal year (FY23).

The lender’s net interest income (NII) stood at Rs 3,950 crore during the reporting period in the current fiscal, up by 32 per cent from Rs 3,002 crore during the same period in the last year. NII is a reflector of interest earned by the bank after measuring the difference between the interest borrowers pay to the bank and the interest paid by the bank to its depositors. 

The bank’s net interest margin (NIM) increased to 6.32 per cent in Q2FY24, compared to 5.83 per cent on a year-on-year (YoY) basis. The NIM represents the ratio of interest income minus interest expense divided by earning assets.

The bank’s deposits gained 44 per cent and stood at Rs 1.64 lakh crore in the second quarter of FY24, against Rs 1.14 lakh crore in the corresponding quarter a year earlier. CASA deposits for the lender jumped 26 per cent and retail deposits gained 50 per cent in the reporting period, both on a YoY basis. 

The lender also registered an increase in it’s asset quality. The Gross Non-Performing Assets (GNPAs) improved to 2.11 per cent in the reporting period, against 3.18 per cent in the same period last year. The Net NPA of the lender also improved to 0.68 per cent in Q2FY24, compared to 1.09 per cent in Q2FY23. NPAs are loans or advances issued by the bank that are subject to late repayment or unlikely to be repaid by the borrower in full. 

Commenting on the performance, the bank’s managing director and CEO, V Vaidyanathan, said, “On the Retail, Rural & SME business, where our bank particularly specializes in, the gross NPA and net NPA have remained very low at 1.53 per cent and 0.52 per cent respectively. We will stay very watchful on this front all the time. We have registered profit of Rs. 1,516 crore in H1-FY24, representing a growth of 47 per cent over PAT of Rs. 1,030 crore in H1-FY23.”