IDFC First Bank (IDFCFIRSTB) Q3 25/26 earnings summary

Executive summary

• Marked 7 years since the merger, transforming from a DFI/wholesale lender to a diversified universal bank with a strong retail, rural, and MSME presence, and a focus on digital banking and technology-driven operations.

• Significant growth in customer deposits, loan book, and branch network since merger, with a robust liability franchise and customer-centricity.

• Recognized for ESG initiatives, digital banking excellence, and robust governance, winning multiple industry awards.

• Unaudited standalone and consolidated financial results for the quarter and nine months ended December 31, 2025, were approved by the Board and reviewed by joint statutory auditors, with unmodified conclusions issued.

• Financial statements prepared in accordance with Indian GAAP, Banking Regulation Act, and RBI guidelines.

Financial highlights

• Deposits grew 22.9% YoY to INR 290,000 crore; customer deposits up 24.3% YoY to INR 283,000 crore; advances at INR 280,000 crore, up 21% YoY.

• CASA deposits reached INR 150,000 crore, up 33% YoY; CASA ratio at 51.6%.

• Profit after tax for Q3 FY26 was INR 503.3 crore, up 48% YoY; nine-month profit at INR 1,317 crore.

• Net interest margin for Q3 FY26 at 5.76%; cost of funds reduced to 6.11%.

• Fee income grew 15.5% YoY; trading gains of INR 96 crore.

Outlook and guidance

• Margins expected to improve further, with Q4 guidance revised upwards to 5.85% due to SA rate reductions.

• Credit cost guidance for FY26 remains at ~2.1%, with expectations to trend lower as MFI issues subside.

• ROA and ROE expected to improve steadily as scale and profitability increase, with full normalization as liability costs decline over the next 4-5 years.

• Targeting further reduction in cost-to-income ratio over the next two years, leveraging digital capabilities and operating leverage.

• Branch network growth to be limited to ~10% annually, with deposit growth estimated at ~25%.