IDFC First Bank net profit at Rs 342 crore surges 168% in March quarter

Bank says the economic impact of the coronavirus is diminishing to help its asset quality, lending

Private sector lender IDFC First Bank reported on Saturday 168 per cent growth in net profit at Rs 342 crore, driven by strong growth in core operating income and lower provisioning.

Net interest income (NII) grew by 36 per cent on year to Rs. 2,669 crore in Q4 FY22, while fee and other income increased by 40 per cent YoY to Rs. 841 crore during the period. The net interest margin for the quarter was 6.27% as compared to 5.17% during the same period the previous year. NIM for FY22 stood improved to 5.96% as compared to 5.03% in FY21.

Core operating income (NII+fee and other income-excluding trading gains) increased by 37 per cent YoY to Rs. 3,510 crore in Q4-FY22 aided by strong NII and fee income growth. Core Operating Profit (excluding trading gains) grew by 106% YoY basis to Rs. 836 crore for the quarter.

“We are happy to share that our core operating profit for Q4 22 has more than doubled (up 106%) to Rs. 836 crore as compared to Rs. 405 crore in Q4 FY 21. This shows the power of the business model we are building,” said V Vaidyanathan, Managing Director and CEO, IDFC FIRST Bank.

Operating expense grew 24 per cent on year to Rs 2,674 crore for Q4-FY22 on account of increased businesses, the bank said.

“Provisions were lower by 36% and 6% on a YoY and QoQ basis respectively at Rs. 369 crore in Q4-FY22 as compared to Rs. 580 crore in Q4-FY21 and Rs. 392 crore in Q3 FY22,” IDFC First said. The bank has not utilised the Covid provision during the quarter and carries Covid provisions of Rs. 165 crore as of March 31, 2022.

Asset quality improved during the quarter, with gross NPAs, as a percentage of gross advances, falling to 3.70 per cent as compared to 4.15 per cent a year ago while net NPA ratio fell to 1.53% from 1.86%.

“We see that the impact of COVID second wave is gradually diminishing and this improvement is showing in the above improvement in asset quality,” the bank said.

The lender said that one infrastructure loan (Mumbai Toll Road account) which became NPA during Q1 FY22, continued to pay its dues partially and the principal outstanding was reduced by Rs 25 crore during the quarter to Rs 794 crore as of March 31, 2022.

“Gradually the cash flows of this account are likely to regularize, as traffic volumes on the Mumbai road come back to normalcy. While the account is NPA as of now, we expect to collect our dues and expect eventual losses on this account to be not material in due course,” it said.