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IDFC First Bank declares PAT growth of 115% YoY, asset quality improves in Q3 | Mint – Mint

IDFC First Bank has declared its Q3FY23 results today and the lender said that it continues to deliver a strong performance on all fronts including profitability, customer deposits, funded asset, capital adequacy, asset quality and net NPA. The bank’s net profit for the third quarter of FY23 climbed by 115% YoY, from Rs. 281 crore in Q3-FY22 to Rs. 605 crore in Q3-FY23, as a result of robust growth in core operating income. The bank’s Net Interest Income (NII) grew 27% YOY from Rs. 2,580 crore in Q3-FY22 to Rs. 3,285 crore in Q3-FY23 and Core Operating Income (NII plus Fees, excluding trading gains) grew 32% from Rs. 3,324 crore in Q3-FY22 to Rs. 4,402 crore in Q3-FY23.

According to IDFC First Bank, its Core Operating Profit (excluding trading gains) increased significantly YoY by 64% from Rs. 745 crore in Q3-FY22 to Rs. 1,225 crore in Q3-FY23. From Rs. 392 crore in Q3-FY22 to Rs. 450 crore in Q3-FY23, the bank’s provisions climbed 15% YOY. According to IDFC First Bank, the RoA (annualised) increased from 0.64% in Q3-FY22 to 1.11% in Q3-FY23, while the RoE (annualised) increased from 5.44% in Q3-FY22 to 10.72% in Q3-FY23.

Customer deposits at IDFC First Bank climbed by 44% between December 31, 2021 and December 31, 2022, from Rs. 85,818 crore to Rs. 1,23,578 crore, while CASA deposits jumped by 39% YoY, from Rs. 47,859 crore in Q3FY22 to Rs. 66,498 crore in Q3FY23. The CASA Ratio decreased from 51.6% as of December 31, 2021 to 50.0% as of December 31, 2022. Retail deposits made up 77% of total customer deposits as of December 31, 2022, according to IDFC First Bank.

As of December 31, 2022, the GNPA in the retail and commercial business stood at 1.87%, and the NNPA was 0.70%, compared to GNPA of 2.92% and NNPA of 1.28% as of December 31, 2021. As of December 31, 2022, the bank’s overall GNPA and NNPA were 2.96% and 1.03%, respectively, compared to GNPA of 3.96% and NNPA of 1.74% reported in the same quarter of the previous fiscal year. As of December 31, 2022, the Bank’s capital adequacy (taking into account 9M FY23 earnings) was excellent at 16.06% and the CET-1 Ratio was 13.49%.

As of December 31, 2022, funded assets (including advances and credit substitutes) were Rs. 1,52,152 crore, a 25% YoY growth from Rs. 1,21,419 crore recorded in Q3FY22.

Mr. V Vaidyanathan, Managing Director and CEO, IDFC FIRST Bank, said, “We are happy to state that we have now built a strong foundation for the bank with CASA ratio at 50% and strong retail deposit franchise contributing 77% of the overall customer deposits. The deposit franchise continues to grow strong at the bank based on our customer friendly products & services, excellent customer service, strong brand known for corporate governance, ethics and digital innovations. We are now confident of growing our loan book in a stable manner on this strong platform.”

“We are happy to share that our asset quality continues to remain strong. On the retail side, where our Bank particularly specializes in, the Gross NPA has come down to 1.87% and the Net NPA has come down to 0.70%, against the guidance of GNPA and Net NPA of 2.0% and 1.0% respectively. Even at the overall bank level, both the Gross and Net NPA improved to 2.96% and 1.03% respectively from 3.96% and 1.74% last year same time. We are confident that our improvement trend would continue going forward as the issues on legacy wholesale book, especially in infrastructure finance, are addressed and the book continue to run down,” said Mr. V Vaidyanathan.

“We are happy to state that we have registered our highest ever profit of Rs. 605 crore in Q3-FY23 and our return on equity has now moved firmly into double digits. We thank all our stakeholders for the confidence and supported us during the last many years and we believe we are all set to deliver strong financial performance from here on. We continue to focus on building a strong culture of customer friendliness, customer service ethics and high levels of corporate governance in the bank in terms of our customer practices,” he further added.

The bank has grown to include 578 rural business correspondent centres, 253 asset service centres, 867 ATMs, 707 branches, an advanced net and mobile banking platform, and 24/7 Customer Care services. With a balance sheet of Rs. 2,21,374 crore, IDFC FIRST Bank provides services to clients all throughout the nation.

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