IDFC First Bank surges 10%, hits 52-week high post Q2 business update

Shares of IDFC First Bank hit a 52-week high of Rs 54.15 as the stock surged 10 per cent on the BSE in Tuesday's intra-day trade amid heavy volumes. The stock spiked after the bank reported a strong business update for September quarter (Q2FY23).

The stock of the private sector lender surpassed its previous high of Rs 53.75, which it had touched on September 15. In the past three months, the stock price of IDFC First Bank has zoomed 60 per cent, as compared to 9 per cent rise in the S&P BSE Sensex. Till 12:49 PM, a combined 85.5 million equity shares had changing hands on the NSE and BSE.

IDFC First Bank's strong momentum in deposits continued in Q2FY23, with customer deposits up 35.9 per cent year-on-year (YoY), and 10.8 per cent quarter-on-quarter (QoQ) to Rs 1.14 trillion, within which CASA deposits grew 37 per cent YoY, and 11.7 per cent QoQ to Rs 63,380 crore. The CASA ratio improved to 51.34 per cent v/s 50.04 per cent in Q1FY23.

Retail business (home loans, loan against property, vehicles financing, credit cards, and other personal credit) represents 66.4 per cent of the overall funded assets of Rs 1.45 trillion as of September 30, 2022. Mortgage business grew by 29.0 per cent on a YoY basis, and constitutes 36.9 per cent, the bank said in its quarterly business update.

"Key input parameters of asset quality such as cheque/ NACH bounces on presentation, which are indicators of future asset quality of advances continued to improve. Asset quality of the loans booked during last 1 year, on a like-to-like vintage comparison basis, is performing better than prior vintage periods, indicating improvement in asset quality going forward," IDFC Bank said.

Motilal Oswal Financial Services said the bank is progressing well in its endeavor to become a Retail lender and is showing strong traction in growing its Retail franchise in terms of loans and deposits. Improvement in the CASA ratio is encouraging and a healthy loan growth, especially Retail, is likely to aid margin, the brokerage firm said in update.