IDFC First Bank rose 1.82% to Rs 39.15 after CRISIL assigned its 'CRISIL AA/Stable' rating to the Rs 2,000 crore Tier II bonds (Under Basel III) of the bank.
The ratings agency has also reaffirmed the rating on the certificate of deposits programme worth Rs 45000 crore at 'CRISIL A1+'.
According to CRISIL, instruments with 'AA' and 'A1' rating are considered to have high degree of safety regarding timely servicing of financial obligations. Such instruments carry very low credit risk.
It said that the rating reflects the bank's healthy capitalisation, increased focus on retailisation of the loan book, and expectation of improvement in earnings profile going forward. These strengths are partially offset by the relatively low, albeit increasing, proportion of current account and savings account (CASA) deposits in borrowings. The ability of IDFC FIRST to maintain good asset quality in the growing retail portfolio over a longer period and on a larger scale will be a key monitorable.
Assigning a 'stable' outlook, it added that IDFC FIRST will benefit from the management's expertise in building up retail operations and will continue to maintain healthy capitalization over the medium term.
IDFC First Bank provides a range of financial solutions to individuals, small businesses and corporates.
The bank reported a net loss of Rs 1638.89 crore in Q3 December 2019 compared with a net loss of Rs 1538.01 crore in Q3 December 2018.
The loss was on account of a one-time provision towards an identified legacy telecom exposure, totaling Rs 1,622 crore for which the bank provided 50% of its exposure and provisions of Rs 110 crore towards one legacy infrastructure account. The bank has a legacy exposure of Rs 3,244 crores to this identified telecom company as of 31 December 2019, of which Rs 2,000 crore is in the form of non-convertible debentures and Rs 1,244 crore is in the form of non-funded exposure (bank guarantees) for spectrum. There has been no payment default so far from this telecom company. However, considering the financial stress in the telecom companies related to payments due to the government, the bank has taken provisioning of 50% of total exposure towards this identified telecom company which is in financial stress, during the quarter ended on 31 December 2019.
Total income rose 19.2% to Rs 4679.14 crore in Q3 December 2019 from Rs 3924.80 crore in Q3 December 2018. Net interest income (NII) in Q3 FY20 grew 34% to Rs 1,534 crore from Rs 1,145 crore in Q3 FY19.
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