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

Executive summary

• The bank, formed by the merger of IDFC Bank and Capital First in December 2018, has evolved from a wholesale-focused DFI to a diversified, retail-centric universal bank with a strong rural and MSME presence, emphasizing deposit mobilization and technology-driven customer service.

• Significant growth in customer deposits, loan book, and branch network since the merger, with a focus on digital banking, customer-centric technology, and ESG initiatives, earning 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.

• Management is confident about future growth, with the microfinance issue largely resolved and a focus on scaling up safer lending segments.

Financial highlights

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

• 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; 9M profit at INR 1,317 crore.

• Net interest income grew 12% YoY; NIM for Q3 FY26 at 5.76%; cost of funds reduced to 6.11%.

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

Outlook and guidance

• Management expects further reduction in cost of funds and improvement in margins, with Q4 NIM guidance revised upwards to 5.85%.

• Credit cost guidance for FY26 remains at ~2.1%, with expectations to improve further as the microfinance impact wanes.

• ROA and ROE are expected to trend up as scale increases and cost-income ratio declines, targeting ROE of 1.6-1.7% in the medium term.

• 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%.