The Bank’s CEO Shares Optimistic Outlook and Ambitious Targets for FY24-29
Bengaluru, NFAPost: In a recent announcement, IDFC FIRST Bank disclosed its unaudited financial results for the quarter and nine months ending on December 31, 2023. The bank showcased a commendable 18% year-on-year (YoY) growth in Profit After Tax (PAT), reaching Rs. 716 Crore for Q3-FY24 and a substantial 37% YoY increase at Rs. 2,232 Crore for the 9 months. The report sheds light on key financial metrics, deposit and borrowing trends, funded assets, asset quality, and the bank’s strategic roadmap for the next five years.
Financial Highlights:
The bank exhibited robust profitability, with Net Interest Income (NII) growing by 30% YoY and Net Interest Margin (NIM) standing at 6.42% in Q3-FY24. Fee and Other Income saw a significant boost of 32% YoY, with retail fees constituting a dominant 93% of the overall fees. The Core Operating Income and Core Operating Profit recorded impressive YoY growth of 31% and 24%, respectively.
Deposit & Borrowing Trends:
IDFC FIRST Bank witnessed a noteworthy 42.8% YoY surge in Customer Deposits, reaching Rs. 1,76,481 Crore as of December 31, 2023. The CASA Ratio stood at 46.8%, reflecting a strong position in Current Account and Savings Account deposits. Retail deposits constituted 79% of the total customer deposits, emphasizing the bank’s retail banking focus.
Funded Assets & Exposure:
Funded assets, including advances and credit substitutes, grew by 24.5% YoY, reaching Rs. 1,89,475 Crore as of December 31, 2023. The bank continued its strategic shift away from infrastructure financing, constituting only 1.6% of total funded assets. Exposure to the top 20 single borrowers improved to 5.93%.
Asset Quality & Provisions:
The bank showcased improved asset quality, with Gross NPA and Net NPA reducing to 2.04% and 0.68%, respectively, as of December 31, 2023. Provisions increased by 45% YoY, and the credit cost as a percentage of average funded assets for 9M-FY24 was 1.26%. The provision coverage ratio also rose to 84.68%.
Capital Position & Liquidity:
IDFC FIRST Bank maintained a strong capital adequacy of 16.73%, with CET-1 Ratio at 13.95% as of December 31, 2023. The average Liquidity Coverage Ratio (LCR) stood at a robust 121% for the quarter ending December 31, 2023.
Guidance 2.0 for FY24-29:
CEO V Vaidyanathan shared the bank’s strategic vision for the next five years, highlighting targets for deposits, assets, asset quality, and profitability. The bank aims for a 5-year CAGR of 24.8% in customer deposits, 20.3% in loans & advances, and a 19.8% CAGR in total assets.
CEO’s Comments and Future Outlook:
Mr. V Vaidyanathan expressed satisfaction with the bank’s performance and shared optimism about the future. He emphasized the bank’s commitment to building a world-class institution, guided by ethics, technology, and a customer-first philosophy.
Conclusion:
IDFC FIRST Bank’s financial results and strategic guidance underscore its commitment to sustainable growth, asset quality, and customer-centric banking. The bank’s proactive approach to evolving market dynamics positions it as a key player in India’s banking landscape.
