IDFC First Bank (IDFCFIRSTB) Q1 24/25 earnings summary

Executive summary

• Deposits reached INR 2,09,666 crore, up 38% year-over-year, with retail deposits forming 80% of total and CASA ratio at 46.6%.

• Asset quality remains strong, with GNPA at 1.90% and NNPA at 0.59% as of June 2024, though JLG/microfinance portfolio was impacted by Tamil Nadu floods.

• Digital transformation and customer-centric products drive efficiency, with high app ratings and multiple awards for innovation.

• The bank is on track or ahead of most FY25 merger guidance metrics, with continued business growth and capital actions.

• Unaudited standalone and consolidated financial results for Q1 FY25 were approved, with no material misstatements identified.

Financial highlights

• Net Interest Income for Q1 FY25 grew 25% YoY to ₹4,695 crore; NIM at 6.22%.

• Fee and other income up 19% YoY, led by retail banking; core operating profit up 30% YoY to ₹1,858 crore.

• PAT for Q1 FY25 was ₹681 crore, down 11% YoY due to higher provisions, mainly from JLG portfolio stress.

• Standalone total income for Q1 FY25 was ₹10,40,775 lakhs, with operating profit at ₹1,88,245 lakhs.

• Deposits grew to ₹2,09,66,632 lakhs as of June 30, 2024, from ₹1,54,42,694 lakhs a year ago.

Outlook and guidance

• Cost-to-income ratio improved to 70.45% in Q1 FY25, projected to decline to 65% by FY27, driven by digitalization and scale efficiencies.

• Credit cost guidance for FY25 is 1.85% including JLG impact, with normalization expected in H2.

• ROA expected to reach 1.2% in FY26 and 1.4% by FY27, with profitability back-ended due to front-loaded provisions.

• Deposit growth expected at 25% annually, with branch expansion limited to 10% per year.

• The amalgamation scheme with IDFC Limited is progressing, with all regulatory approvals received and final NCLT approval pending.