IDFC First Bank (IDFCFIRSTB) Q3 24/25 earnings summary

Executive summary

• Balance sheet and loan book expanded 24% and 22% YoY respectively, with customer deposits up 29% YoY to ₹2.27 lakh crore and retail deposits up 30% YoY; CASA deposits rose 32% YoY.

• Net profit for Q3 FY25 declined 53% YoY to ₹339 crore, but rose 69% sequentially; asset quality stable with gross NPA at 1.94% and net NPA at 0.52%.

• Operating leverage improved as OpEx growth moderated; cost-to-income ratio expected to decline, supporting long-term ROA target above 2%.

• Amalgamation of IDFC Limited and IDFC Financial Holding Company Limited with the bank became effective October 1, 2024, impacting share capital and comparability of results.

• Management remains confident in long-term growth, targeting 20%+ loan growth and 22–24% deposit growth.

Financial highlights

• Net Interest Income for Q3 FY25 up 14% YoY to ₹4,902 crore; net interest margin at 6.04%, down 14 bps sequentially.

• Fee and other income up 20% YoY to ₹1,757 crore, 92% retail-led.

• Operating expenses grew 16% YoY; core operating profit up 15% YoY to ₹1,736 crore.

• Provisions for the quarter at ₹1,338 crore; credit cost at 2.3% (1.8% ex-MFI); PAT for the quarter at ₹313 crore, up sequentially but down YoY due to MFI impact.

• Capital adequacy at 16.11%, CET1 at 13.68%; LCR stable at 114%.

Outlook and guidance

• Loan book expected to grow ~20%, deposits 22–24% in FY25; income growth for FY26 estimated at 14–15% due to lower MFI contribution.

• Cost-to-income ratio targeted to reach 65% by FY27, with long-term goal in the 50s.

• Management expects credit cost on MFI to peak in Q4, then decline sequentially; overall credit cost to trend lower in FY26.

• Bank is on track or has achieved most merger guidance targets for FY25, including CET-1, capital adequacy, CASA ratio, and retail loan mix.

• ROA and ROE below guidance but expected to improve with scale.