IDFC First Bank (IDFCFIRSTB) Q2 24/25 earnings summary

Executive summary

• Q2 FY25 results showed strong growth in deposits (up 32.4% YoY to ₹2,18,026 crore) and loans (up 21.5% YoY to ₹2,22,613 crore), with retail loans up 25.1% and CASA ratio at 48.9%.

• Core operating profit increased 28% YoY, but net profit declined to ₹201 crore due to elevated provisions, mainly from the MFI segment and a legacy toll road account; adjusted PAT was ₹626 crore.

• Asset quality remained stable with gross NPA at 1.92% and net NPA at 0.48%, and provision coverage at 75.27%.

• Capital adequacy ratio stood at 16.36% (CET-1: 13.84%), with post-merger CRAR at 16.60% and CET-1 at 14.08%.

• The amalgamation of IDFC Limited and IDFC FIRST Bank became effective October 1, 2024, with share capital adjustments completed.

Financial highlights

• Customer deposits reached ₹2,18,026 crore, up 37% YoY; CASA deposits at ₹1,09,000 crore.

• Funded assets grew 21.5% YoY to ₹2,22,613 crore; retail asset growth at 25%.

• Net Interest Income rose 21% YoY to ₹4,788 crore; NIM stable at 6.18%.

• Fee income up 18% YoY; trading gains at ₹105 crore; operating expenses increased 18% YoY.

• Standalone net profit for Q2 FY25 was ₹68,065 lakhs, up from ₹20,069 lakhs in Q2 FY24; capital adequacy ratio (Basel III) at 16.01%.

Outlook and guidance

• Credit cost for FY25 guided at 225 basis points, including MFI and toll account impacts.

• Management expects normalization of credit costs in FY26, with further improvement as the insured MFI book matures.

• Long-term growth targets remain intact, with 25% loan growth and strong deposit momentum expected.

• ROA expected to reach 1.4%-1.6% in the next 2-3 years, with a path to 1.9%-2% by FY29, subject to regulatory and market changes.

• On track or ahead of all major merger guidance targets for FY25, including capital ratios, deposit mix, branch expansion, and asset quality.