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% end-of-period and 32% on average basis.

• Loans and advances increased 20% YoY to INR 2.67 lakh crore, with strong growth in mortgages, vehicle loans, business banking, and wholesale loans; microfinance portfolio declined to 2.7% of assets.

• Asset quality improved: gross NPA at 1.86%, net NPA at 0.52%, and PCR at 72.2%.

• Profit after tax for Q2 FY26 was INR 352 crore, up 75.6% YoY but down 23.8% QoQ; H1 FY26 net profit grew 75% YoY.

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

Financial highlights

• Average CASA ratio improved to 48.6% from 46.3% YoY; period-end CASA ratio at 50.1%.

• Credit card book crossed INR 8,600 crore, with over 4 million cards issued and 30% YoY growth in spends for H1 FY26.

• Wealth management AUM grew 28% YoY to INR 55,000 crore.

• Net interest margin (NIM) at 5.59%, down 59 bps YoY and 12 bps QoQ.

• Fee and other income up 13.2% YoY; trading gains sharply lower at INR 56 crore vs INR 495 crore in Q1.

Outlook and guidance

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

• Credit cost guidance maintained at 2.05%-2.1% for FY26, with H2 expected to be lower at 1.6%-1.8%.

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

• Bank targets further improvement in cost-to-income ratio to ~65% by FY27.

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