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% 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 was impacted by Tamil Nadu floods.

• Digital capabilities, customer-centric products, and ESG initiatives drive efficiency, growth, and deposit mobilization.

• The Board approved unaudited financials for Q1 FY25, with no material misstatements; business growth and capital actions continued.

• The bank is on track or ahead of most FY25 merger guidance metrics, with progress on the IDFC Limited amalgamation pending final NCLT approval.

Financial highlights

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

• Fee and other income up 19% year-over-year, with 92% from retail banking.

• Core operating profit increased 30% year-over-year to ₹1,858 crore; 5-year CAGR of 40%.

• PAT for Q1 FY25 was ₹681 crore, down 11% year-over-year, mainly due to higher provisions.

• Standalone total income for Q1 FY25 was ₹10,40,775 lakhs, with consolidated income at ₹10,36,270 lakhs; operating profit (standalone) was ₹1,88,245 lakhs.

Outlook and guidance

• Cost-to-income ratio improved to 70.45% in Q1 FY25, expected to decline to 65% by FY27.

• Credit cost guidance for FY25 is 1.85%, including JLG impact; excluding JLG, it remains at 1.65%.

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

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

• Guidance 2.0 targets 17-18% ROE, GNPA <1.5%, NNPA <0.4% by FY29.