On October 28, 2023: IDFC First Bank (BSE, NSE: IDFCFIRSTB) announced its Q2 2023-24 financial results, delivering substantial growth in Profit After Tax and strong gains in Core Operating Profit.
Key Highlights
Here are the main highlights of the Q2 results:
- For Q2 FY23-24, Net Profit grew 35% YoY, taking the figure from ₹556 Cr in Q2 FY22-23 to ₹751 Cr in Q2 FY23-24. This growth is largely due to robust growth in the bank’s operating income.
- Net Interest Income went up 32% YoY, from ₹3,002 Cr in the same quarter of the previous fiscal year to ₹3,950 Cr in the second quarter of the current fiscal year.
- Net Interest Margin was 6.32% in Q2 of this fiscal year, against 5.83% in Q2 of the previous fiscal year.
- RoA improved to 1.16% in Q2 FY23-24, from Q2 FY22-23 when it was at 1.07%
- RoE also saw an improvement to 11.03% this quarter from the same quarter of the previous fiscal year when it was 10.13%.
- Customer deposits saw an increase of 44% YoY, from ₹1,14,004 Cr in Q2 FY22-23 to ₹1,64,726 Cr in Q2 FY23-24.
- CASA deposits witnessed a growth of 26% YoY, and the CASA Ratio stands at 46.4% in Q2 of this fiscal year.
- 77% of the total customer deposits are in the retail banking segment.
- The Net NPA of IDFC First Bank has witnessed an improvement from 1.09% in Q2 FY22-23, to 0.68% in Q2 FY23-24.
- The bank continues its strategy to wind down on financing of infrastructure projects.
- In October 2023, the bank earned a new credit rating by CARE – Long-term Credit Rating: AA (stable) to AA+ (stable).
Additional Read: Q2 Results Dashboard
Management Commentary
The MD and CEO of IDFC First Bank, V. Vaidyanathan, had some insights on the Q2 results and these are indicated below:
- The bank is looking at growth strategies for the long term, and keeping this in mind, it continues to develop its products.
- Customer deposits spell goodwill for the bank, and these have displayed continued growth in Q2, growing at 44% YoY, with a high CASA ratio.
- The bank’s asset quality shows continuous improvement with the Gross and Net NPA remaining at 1.53%, and 0.52%, respectively. This is true for the bank’s specialty services in the sectors of Retail, SME, and Rural Banking.
- The bank has recorded a sound half-yearly profit of ₹1,516 Cr.
Additional Read: IDFC First Bank Share
Financial Results
Here are the financial results of Q2 in a nutshell (figures are in ₹ Cr unless indicated by %):
| Metrics | Q2 FY2022-23 | Q1 FY2023-24 | Q2 FY2023-24 | Growth (%) YoY |
| Net Interest Income | 3,002 | 3,745 | 3,950 | 32% |
| Operating Income | 4,064 | 5,159 | 5,380 | 32% |
| Operating Profit (PPOP) | 1,169 | 1,500 | 1,510 | 29% |
| Profit Before Tax | 745 | 1,024 | 982 | 32% |
| Profit After Tax | 556 | 765 | 751 | 35% |
About IDFC First Bank
When IDFC Limited was first incorporated in 1997, its purpose was to finance projects related to infrastructure, the raising of capital, and project financing in terms of the development of infrastructure in the private sector. At that time, the company’s desire was to finance enterprises and support them through the addition of value and provide financing for innovative products. Starting as a financing firm, the company applied for the certification to become a bank in 2013. By this time, the company had spread its wings and made inroads into asset management, institutional broking, and the establishment of infrastructure debt funds. The firm got its licencing to commence banking operations in 2014, and soon the banking firm in the private sector was set up. In 2015, the IDFC First Bank was launched as a result of the demerger of the lending and infrastructure business of IDFC Limited.
Additional Read: Banking Sector in India
From its beginnings as a bank, the company has developed a healthy network with sound advancements in technology, scaling up the operations of banking effectively. The bank is involved in the business of corporate and retail banking with a robust footprint in the Indian sector of banking and finance.
Source: https://www.idfcfirstbank.com/investors/financial-report
