The Board of Directors of IDFC FIRST Bank, in its meeting held today, approved the unaudited financial results for the quarter ended June 30, 2023, the company on Saturday announced through an exchange filing.
Profitability
Net Profit for Q1FY24 grew 61 percent YOY from ₹474 crore in Q1FY23 to ₹765 crore in Q1FY24 driven by strong growth in core operating income.
Core Operating Profit (pre provision operating profit excluding trading gains) grew strongly by 45 percent YOY from ₹987 crore in Q1FY23 to ₹1,427 crore for the quarter Q1FY24.
Net Interest Income (NII) grew 36 percent YOY from ₹2,751 crore in Q1FY23 to ₹3,745 crore in Q1FY24. Net interest Margin (gross of IBPC and selldown) was 6.33 percent in Q1FY24 as compared to 5.77 percent in Q1FY23 and 6.41 percent in Q4FY23.
Fee and Other Income grew by 49 percent YoY from ₹899 crore in Q1FY23 to ₹1,341 crore in Q1FY24. Retail fees constitute 91 percent of the overall fees for the quarter Q1FY24. Core Operating income (NII plus Fees, excluding trading gains) grew 39 percent from ₹3,650 crore in Q1FY23 to ₹5,086 crore in Q1FY24.
Operating Expense grew by 37 percent YoY from ₹2,663 crore in Q1FY23 to ₹3,659 crore in Q1FY24, primarily on account of employee increments, branch expansion and increase in business volumes.
Provisions increased 55 percent YOY from ₹308 crore in Q1FY23 to ₹476 crore in Q1FY24. The credit cost (quarterly annualized) as percent of average funded assets for Q1FY24 was 1.16 percent as against 1.26 percent in Q4FY23.
RoA (annualized) improved from 0.97 percent in Q1FY23 to 1.26 percent in Q1FY24. RoE (annualized) improved from 8.96 percent in Q1FY23 to 11.78 percent in Q1FY24, including the impact of about 60 bps due to equity capital raise in March 2023.
Deposits & Borrowings
Customer Depositsincreased by 44 percent YoY from ₹1,02,868 crore as of June 30, 2022 to ₹1,48,474 crore as of June 30, 2023.
CASA Deposits grew by 27 percent YoY from ₹56,720 crore as of June 30, 2022 to ₹71,765 crore as of June 30, 2023. CASA Ratio reduced from 50.0 percent as of June 30, 2022 to 46.5 percent as of June 30, 2023, because of shift from savings accounts to term deposits due to prevailing interest rates.
Retail deposits grew by 51 percent YoY from ₹75,800 crore as of June 30, 2022 to ₹1,14,272 crore as of June 30, 2023. Retail deposits constitutes 77 percent of total customer deposits as of June 30, 2023.
Legacy High Cost Borrowings reduced from ₹22,406 crore as of June 30, 2022 to ₹16,055 crore as of June 30, 2023.
Funded Assets
Funded assets (including advances & credit substitutes) increased by 25 percent YoY from ₹1,37,663 crore as of 30 June 2022 to ₹1,71,578 crore as of June 30, 2023.
The Bank continues to wind down infrastructure financing as per stated strategy and now constitutes only 2.2 percent of total funded assets as of June 30, 2023. Exposure to top 20 single borrowers reduced from 9 percent as of June 30, 2022 to 7 percent as of June 30, 2023.
“We continue to build a strong franchise with a high CASA Ratio of 46.5%. Our retail deposits are growing well, based on our strong positive brand, ethics, customer-friendly products and digital innovations. We are happy to share that our asset quality continues to remain strong. On the Retail, Rural & SME business, where our Bank particularly specializes in, the Gross NPA has come down to as low as 1.53% and the Net NPA has come down to 0.52%," said V Vaidyanathan, Managing Director and CEO, IDFC FIRST Bank.
Assets Quality
Gross NPA (GNPA) of the bank has improved to 2.17 percent as of 30 June 2023 from 3.36 percent of 30 June 2022 and 2.51 percent as of 31 March 2023. Net NPA (NNPA) of the bank has improved to 0.70 percent as of 30 June 2023 from 1.30 percent of 30 June 2022 and 0.86 percent as of 31 March 2023.
GNPA of the Retail, Rural and SME Finance has improved to 1.53 percent as of 30 June 2023 from 2.12 percent of 30 June 2022 and 1.65 percent as of 31 March 2023. NNPA of the Retail, Rural and SME Finance has improved to 0.52 percent as of 30 June 2023 from 0.93 percent of 30 June 2022 and 0.55 percent as of 31 March 2023.
Excluding the infrastructure financing book which the Bank is running down, the GNPA and NNPA of the Bank would have been 1.71 percent and 0.44 percent respectively as of June 30, 2023. SMA-1 and SMA-2 (31-90 DPD which is the pre-NPA stage) in Retail, Rural and SME Finance portfolio has reduced from 1.25 percent as of June 30, 2022 to 0.85 percent as of June 30, 2023.
Collection efficiency for urban retail business (excluding prepayments and EMI arrears) in current bucket continues to remain high at 99.5 percent. Provision coverage ratio of the bank has increased to 83.12 percent as of June 30, 2023 from 73.13 percent as of June 30, 2022. Standard restructured book stood at 0.47 percent of the funded asset book as against 1.27 percent at June 30, 2022 and 0.59 percent at March 31, 2023.
Capital Position & Liquidity
Capital Adequacy of the Bank was strong at 16.96 percent with CET-1 Ratio at 13.70 percent as on June 30, 2023. Average LCR was strong at 125 percent for the quarter ending on June 30, 2023.
