IDFC First Bank, on Thursday, reported a 12% year-on-year decline in net profit at Rs 642.64 crore for the June quarter, impacted by increase in provisions for microfinance loans.
The net interest income, the difference between interest earned and paid, rose 25.4% to Rs 4,695 crore in the first quarter of the current fiscal year, compared to Rs 3,745 crore in the year-ago period.
“The biggest requirement in banking today is the ability to raise deposits.
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“On this front, we continue to get strong growth in deposits based on top quality service levels, top in class mobile app, and excellent corporate governance,” said V Vaidyanathan, managing director and CEO, IDFC FIRST Bank.
“We took extra provisions for MFI business because of massive floods in Tamil Nadu and because of seasonality. We expect credit cost to normalise in H2 FY25 as guided earlier,” he said.
Provisions increased 109% to Rs 994 crore in the first quarter of current fiscal from Rs 476 crore in the same quarter of previous fiscal. The surge was primarily due to rise in provisions of the Joint Liability Group (JLG) portfolio, impacted by the flood in Tamil Nadu and seasonal impact.
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The net interest margin reduced from 6.33 % in the June quarter of FY24 to 6.22 % in same quarter of FY25.
Loans and advances (including credit substitutes) increased by 22% from Rs 1.71 trillion as of June 30, 2023 to Rs 2.09 trillion as of June 30, 2024. The bank continues to wind down infrastructure financing as per the stated strategy and now constitutes only 1.3% of total funded assets as of June 30, 2024.
Total deposits increased by 35.8% YOY from Rs 1.54 trillion as of June 30, 2023 to Rs 2.09 trillion as of June 30, 2024. Retail deposits, which constituted 80.2% of total customer deposits, grew by 43.5% YoY to Rs 1.64 trillion as of June 30 this year.
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Gross NPA of the bank has improved from 2.17% as of June 30, 2023 to 1.90% of June 30, 2024, improved by 27 bps while net NPA improved from 0.70% as of June 30, 2023 to 0.59% of June 30, 2024, improved by 11 bps.
