• Deposit Growth: 32% YoY growth, reaching INR218,000 crores.

• Retail Deposits: Increased by 37% YoY to INR175,000 crores.

• CASA Deposits: Grew by 37.5% to INR109,000 crores.

• CASA Ratio: Over 48%.

• Cost of Funds: Stable at 6.46% (6.37% excluding legacy costs).

• Loan Growth: 21.5% YoY increase, total loan book at INR222,000 crores.

• Retail Loan Growth: 25% YoY increase.

• Corporate Loan Growth: 20% YoY increase.

• Gross NPA: 1.92% at the bank level.

• Net NPA: 0.48% at the bank level.

• Provision Coverage Ratio (PCR): 75%.

• Provisions: INR1,732 crores, including INR568 crores extra provision.

• Net Interest Income (NII): Up 21% YoY to INR4,788 crores.

• Net Interest Margin (NIM): 6.18%.

• Core Operating Profit: Up 28% YoY.

• Profit After Tax (PAT): INR201 crores.

• Adjusted PAT: INR626 crores, excluding additional provisions.

• Capital Adequacy Ratio (CET1): 14.08% including merger benefits.

• Branch Count: 961 branches.

• Credit Cards Issued: Over 3.1 million.

• Warning! GuruFocus has detected 1 Warning Sign with BOM:539437.

Release Date: October 26, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• IDFC First Bank Ltd (BOM:539437) reported a strong year-on-year growth in deposits of 32%, reaching INR218,000 crores, which supports loan growth.

• Retail deposits increased by 37% year-on-year, despite a reduction in savings account interest rates, indicating strong customer retention.

• The bank's CASA deposits grew by 37.5% this quarter, with a CASA ratio of over 48%, reflecting a stable funding base.

• The retail loan book grew by 25% year-on-year, maintaining good asset quality with a gross NPA of 1.57% and net NPA of 0.53%.

• IDFC First Bank Ltd (BOM:539437) received a AAA rating from CRISIL for its fixed deposit program, highlighting its strong financial position and management practices.

Negative Points

• The bank faced significant provisions this quarter, totaling INR1,732 crores, primarily due to issues in the microfinance (MFI) business and a toll road account.

• The MFI business experienced increased delinquencies, leading to a conservative contingency provision of INR315 crores.

• A toll road account required a 100% provision of INR250 crores due to a government directive halting toll collections, impacting profitability.

• The overall credit cost, excluding MFI and toll provisions, was 1.8%, indicating challenges in maintaining low credit costs across the board.

• The bank's profitability was impacted, with a reported profit after tax of INR201 crores, significantly affected by the additional provisions.

Q & A Highlights

Q: Every quarter, there are some surprises coming up in our bank. How should we model for the next two to four quarters? And how are you seeing the environment for the housing finance in the next few quarters? A: Housing Finance is stable and growing at 20%. Regarding surprises, we believed infrastructure issues were behind us, but unexpected state government decisions affected us. We are cautious about project infrastructure financing due to external risks.