IDFC First Bank (IDFCFIRSTB) Q2 25/26 earnings summary

Executive summary

• Customer deposits grew 23.4% YoY to INR 2.69 lakh crore, with retail deposits up 21.4% YoY and CASA deposits up 26.8% YoY at period end.

• Loans and advances increased 19.7% YoY to INR 2.67 lakh crore, with strong growth in mortgages, vehicle loans, and business banking.

• Asset quality improved: gross NPA down to 1.86% and net NPA to 0.52% sequentially; SMA positions also improved.

• Profit after tax for Q2 was INR 352 crore, with H1 net profit up 75% YoY, though Q2 profit declined 23.8% sequentially due to lower trading gains.

• Built a universal bank with a full suite of products, robust digital platforms, and a strong brand presence.

• Unaudited standalone and consolidated financial results for the quarter and half year ended September 30, 2025, were approved by the Board and reviewed by joint statutory auditors, with unmodified conclusions issued.

Financial highlights

• Loans & Advances reached ₹2,66,579 Cr (20% YoY, 5% QoQ); Customer Deposits at ₹2,69,094 Cr (23% YoY, 5% QoQ).

• Net Interest Margin (Q2 FY26) at 5.59% (-59 bps YoY); CASA ratio at 50.1% (+119 bps YoY).

• Standalone net profit for Q2 FY26 was ₹35,231 lakh, up from ₹20,069 lakh in Q2 FY25; H1 FY26 net profit was ₹81,488 lakh.

• Cost to Income ratio at 70.9% in H1 FY26; Opex growth at 11.8% YoY, below business growth.

• Capital Adequacy Ratio at 14.34% (post-CCPS conversion: 16.82%).

Outlook and guidance

• Margins expected to improve in Q3 and Q4, with Q4 NIM guidance above 5.8%, assuming another repo cut.

• Credit cost guidance maintained at 2.05%-2.1% for FY26, with H2 expected to be lower than H1.

• NII expected to increase in H2 FY26 as deposit rate reductions flow through.

• Cost to Income ratio targeted to improve to ~65% by FY27, driven by scale and digital leverage.

• Microfinance book expected to stabilize by year-end and resume growth next year.