IDFC First Bank gained 1.48% to Rs 58.15 after the private lender reported a net profit of Rs 555.57 crore in Q2 FY23, steeply higher than Rs 151.74 crore recorded in Q2 FY22.
The surge in the net profit was mainly driven by strong growth in core operating income.
Total Income jumped 33.82% to Rs 6531.03 crore in quarter ended 30 September 2022 from Rs 4880.29 crore posted in the corresponding quarter previous year.
Net Interest Income (NII) grew by 32% year on year (YoY) to Rs 3,002 crore in Q2 FY23 as against Rs 2,272 crore reported in Q2 FY22. Net Interest Margin (NIM) increased to 5.98% in Q2 FY23 compared to 5.83% in Q2 FY22.
Fee and other income surged 44% YoY to Rs 945 crore in Q2 FY23 from Rs 658 crore posted in the same quarter last year.
Core operating income (NII + fee and other income excluding trading gains) increased by 35% YoY to Rs 3,947 crore in Q2 FY23 from Rs 2,930 crore in Q2 FY22 aided by strong NII and fee income growth. Fee income growth was contributed primarily by the fees related to loan sourcing, higher transaction led fees, distribution and wealth management fees etc. Retail fees (including toll and credit card) constitutes 92% of the overall fees for the quarter.
Core operating profit (excluding trading gains) soared 84% YoY to Rs 1,052 crore in quarter ended 30 September 2022 from Rs 571 crore in Q2 FY22.
Provisions were lower by 11% YoY at Rs 424 crore in Q2 FY23 as compared to Rs 475 crore in Q2 FY22. The credit cost (quarterly annualized) as % of average funded assets for Q2 FY23 was 1.2%.
The bank is well on track to meet the asset quality and credit cost guidance. Based on the improved portfolio performance indicators, the bank is confident to achieve its FY23 credit cost guidance at lower than 1.5% of the total average funded assets, the private lender said.
On the asset quality side, gross non-performing assets (NPAs) stood at Rs 4,396.19 crore as on 30 September 2022 as against Rs 4,354.75 crore as on 30 June 2022 and Rs 4,485.53 crore as on 30 September 2021.
The ratio of gross NPAs to gross advances stood at 3.18% as on 30 September 2022 as against 3.36% as on 30 June 2022 and 4.27% as on 30 September 2021.
The ratio of net NPAs to net advances stood at 1.09% as on 30 September 2022 as against 0.97% as on 30 June 2022 and 2.09% as on 30 September 2021.
Funded assets jumped 25% YoY to Rs 1,45,362 crore as on 30 September 2022 from Rs 1,16,470 crore as on 30 September 2021.
The bank's CASA Deposits grew 37% YoY to Rs 63,305 crore as on 30 September 2022, as compared to Rs. 46,269 crore as on 30 September 2021. CASA Ratio was at 51.28% as on 30 September 2022, as compared to 50.04% as on 30 June 2021 and as compared to 51.28% as on 30 September 2021.
The customer deposits increased by 36% to Rs 1,14,004 crore as of 30 September 2022 as compared to Rs 83,889 crore as of 30 September 2021.
Capital adequacy of the bank was at 15.35% with CET-1 Ratio at 13.67% as on 30 September 2022. Average liquidity coverage ratio (LCR) was at 131% for the quarter ending on 30 September 2022.
V Vaidyanathan, managing director and CEO, IDFC First Bank, said, We have built a strong foundation at the bank over the past three years. This includes a strong retail liabilities franchise with strong CASA ratio of 50% and great service standards.
Our profit after tax has grown consistently for the 5th consecutive quarter, reflecting the resilience of our franchise. I am happy to share that we have posted the highest-ever profit in the history of the bank this quarter at Rs 556 crore, driven by strong growth in core operating income. We are confident of sustaining this trend as the new lines of businesses launched, such as cash management, wealth management, FASTag, credit cards, are at the start of the journey and have immense potential going forward.
On the asset quality front, we have a long track record of 12 years of maintaining our retail gross NPA and net NPA at around 2% and 1% respectively through the economic slowdown in 2010-2014, Demonetisation in 2016, GST implementation in 2017, and ILFS crisis in 2018-19. I am happy to share that even after COVID, the retail asset quality has reverted to long term sustainable levels with GNPA of 2.03% and NNPA of 0.73% as of September 30, 2022.
IDFC First Bank was formed by the merger of erstwhile IDFC Bank and Capital First. As on 30 September 2022, the bank has 670 branches and 812 ATMs (including recyclers) across the country. The bank has added 29 branches and 93 ATMs since 31 March 2022.
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