IDFC Gross NPA Improves to 1.90% by June 2024
IDFC FIRST Bank's Gross NPA improved to 1.90% by June 2024, down from 2.17% a year earlier, while Net NPA decreased to 0.59% from 0.70%, with a provision coverage ratio rising to 69.38% from 68.11%
by Damodharan N
Updated Jul 29, 2024
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IDFC FIRST Bank has announced a notable improvement in its asset quality for the quarter ending June 30, 2024. The bank's Gross Non-Performing Assets (NPA) declined to 1.90% from 2.17% in the same period last year, marking an improvement of 27 basis points year-on-year. Similarly, the Net NPA reduced to 0.59% from 0.70% a year ago, showing an improvement of 11 basis points.
The bank's performance in retail, rural, and MSME finance also showed positive trends. Gross NPA in these segments improved to 1.46% from 1.53%, and Net NPA decreased to 0.46% from 0.52%, reflecting improvements of 7 and 6 basis points respectively.
Excluding the infrastructure financing book, which the bank is currently winding down, the Gross NPA and Net NPA would have been 1.60% and 0.43% respectively as of June 30, 2024. Although SMA-1 and SMA-2 in the retail, rural, and MSME finance portfolios increased slightly to 1.01% from 0.85% due to a rise in small microfinance loans, the bank's provision coverage ratio improved to 69.38%, up from 68.11% a year earlier. Without the infrastructure book, the provision coverage ratio would have been 73.48%.
Source: Here
IDFC Q1 FY25 Results
IDFC FIRST Bank has released its financial results for the first quarter of FY25, showcasing a mixed performance. The bank’s profit after tax (PAT) for Q1 FY25 was ₹681 crores, down 11% year-on-year from ₹765 crores in Q1 FY24.
This decline was mainly due to increased provisions for the JLG (Joint Liability Group) business, affected by floods in Tamil Nadu. Without these provisions, PAT would have been ₹100 crores higher.The bank's core operating profit surged by 30% year-on-year to ₹1,858 crores, while core operating income grew by 24% to ₹6,290 crores.
Net interest income (NII) rose by 25% to ₹4,695 crores, although the net interest margin slightly decreased to 6.22%. Deposits showed strong growth, with total deposits increasing by 35.8% year-on-year to ₹2,09,666 crores.
Customer deposits rose by 37.8%, and CASA deposits grew by 36.1%, improving the CASA ratio to 46.6%. Retail deposits also saw a 43.5% increase, making up 80.2% of total customer deposits. The bank reduced its legacy high-cost borrowings from ₹16,055 crores to ₹10,084 crores.
Loans and advances grew by 22% year-on-year to ₹2,09,361 crores, with the credit to deposit ratio improving to 98.1% from 107.3%. The incremental credit to deposit ratio was 72.1%. The bank is continuing its strategy to wind down infrastructure financing, which now constitutes just 1.3% of total funded assets.
The bank’s asset quality improved, with Gross NPA reducing to 1.90% and Net NPA to 0.59%. The provision coverage ratio increased to 69.38%. Capital adequacy remained strong, with a capital adequacy ratio of 15.88% and a CET-1 ratio of 13.34%. Including recent capital raises, the capital adequacy ratio is expected to reach 17.21%, with a CET-1 ratio of 14.67%.
Comments from Managing Director & CEO Mr. V Vaidyanathan, Managing Director and CEO, IDFC FIRST Bank, said, “The biggest requirement in Banking today is the ability to raise deposits. 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.
Our CASA ratio is sustained at 46.6%. Our customer deposits have grown 38% YoY. We thank our customers for their goodwill towards us. Overall Gross NPA was stable at 1.90% and Net NPA was 0.59%. Provisions normalized this quarter in line with the industry.
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. On the profitability front, the Core Operating Profit (Income less Opex) rose 31% YoY excluding trading gains. This continues on the back of strong core Operating Profit in FY24, which was up 31% from Rs. 4,607 crore in FY23 to Rs. 6,030 crore in FY24”.
Overall, IDFC FIRST Bank demonstrated robust core operating performance despite challenges in the JLG portfolio, with expectations for credit costs to normalize by Q3 FY25.
IDFC First Bank
IDFC FIRST Bank is a modern universal bank in India that focuses on ethical, digital, and socially responsible banking. It stands out by offering transparent, fee-free services on savings accounts and credit cards, avoiding hidden charges.
The bank features a comprehensive mobile app with over 250 tools for personal and business banking, and provides easy access to various financial products. It serves a broad customer base, including low-income individuals and SMEs, with financing options like loans for lifestyle improvements, sanitation, mobility, and women entrepreneurs.
Additionally, IDFC FIRST Bank offers a full range of corporate and trade finance services, wealth management, and global banking solutions.
IDFC Gross NPA Improves to 1.90% by June 2024 - FAQs
1. What was IDFC FIRST Bank’s Gross NPA as of June 30, 2024?
The Gross Non-Performing Assets (NPA) was 1.90%.
2. How much did the Gross NPA improve from the previous year?
It improved from 2.17% to 1.90%, showing a 27 basis points improvement.
3. What was the Net NPA for IDFC FIRST Bank as of June 30, 2024?
The Net Non-Performing Assets (NPA) was 0.59%.
4. How did the Net NPA change compared to the previous year?
It decreased from 0.70% to 0.59%, reflecting an 11 basis points improvement.
5. What was the Gross NPA for retail, rural, and MSME finance as of June 30, 2024?
The Gross NPA in these segments was 1.46%.
6. How did the Gross NPA in these segments change from the previous year?
It improved from 1.53% to 1.46%, a 7 basis points improvement.
7. What was the Net NPA for retail, rural, and MSME finance as of June 30, 2024?
The Net NPA in these segments was 0.46%.
8. How did the Net NPA in these segments change from the previous year?
It decreased from 0.52% to 0.46%, showing a 6 basis points improvement.
9. What would the Gross NPA and Net NPA be without the infrastructure financing book?
The Gross NPA would be 1.60% and the Net NPA would be 0.43%.
10. What was the provision coverage ratio as of June 30, 2024?
The provision coverage ratio was 69.38%.
11. How did the provision coverage ratio change from the previous year?
It increased from 68.11% to 69.38%.
12. What would the provision coverage ratio be excluding the infrastructure financing book?
The provision coverage ratio be excluding the infrastructure financing book would be 73.48%.
13. What was IDFC FIRST Bank’s profit after tax (PAT) for Q1 FY25?
The IDFC FIRST Bank’s PAT was ₹681 crores.
14. How did PAT for Q1 FY25 compare to Q1 FY24?
PAT decreased by 11% from ₹765 crores in Q1 FY24.
15. What was the core operating profit for IDFC FIRST Bank in Q1 FY25?
The core operating profit was ₹1,858 crores.
16. How much did the core operating profit grow year-on-year in Q1 FY25?
It grew by 30% from ₹1,428 crores in Q1 FY24.
17. What was the net interest income (NII) for Q1 FY25?
The NII was ₹4,695 crores for Q1 FY25.
18. How did the net interest income (NII) change from Q1 FY24?
It increased by 25% from ₹3,745 crores.
19. What was the net interest margin (NIM) for Q1 FY25?
The net interest margin was 6.22%.
20. How did the net interest margin change from Q1 FY24?
It decreased slightly from 6.33%.
21. What was the total amount of deposits for IDFC FIRST Bank as of June 30, 2024?
The total deposits were ₹2,09,666 crores.
22. How much did total deposits increase year-on-year?
They increased by 35.8% from ₹1,54,432 crores.
23. What was the CASA ratio as of June 30, 2024?
The CASA ratio was 46.6% as of June 30, 2024.
24. What was the growth rate of CASA deposits year-on-year?
CASA deposits grew by 36.1% from ₹51,248 crores.
25. What percentage of total customer deposits were retail deposits as of June 30, 2024?
Retail deposits made up 80.2% of total customer deposits.
26. What was the total amount of loans and advances as of June 30, 2024?
Loans and advances amounted to ₹2,09,361 crores.
27. How did the loans and advances figure change from the previous year?
It increased by 22% from ₹1,71,578 crores.
28. What was the credit to deposit ratio as of June 30, 2024?
The credit to deposit ratio was 98.1%.
29. What was the incremental credit to deposit ratio from June 30, 2023, to June 30, 2024?
The incremental credit to deposit ratio was 72.1%.
30. What was the capital adequacy ratio as of June 30, 2024?
The capital adequacy ratio was 15.88%.
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