IDFC First Bank advanced 3.46% to Rs 38.85 after the bank reported a net profit of Rs 474 crore in Q1 FY23 as against a net loss of Rs 630 crore in Q1 FY22.
Net Interest Income (NII) grew by 26% YoY to Rs 2,751 crore in Q1 FY23, up from Rs 2,185 crore in Q1 FY22. Net Interest Margin (NIM) of the bank was at 5.89% for Q1 FY23 compared to 5.50% in Q1 FY22.
Fee and Other Income increased by 100% YoY to Rs 899 crore in Q1 FY23 from Rs 449 crore in Q1 FY22. Of this, share of wealth management & 3rd party distribution was 11% while that of credit card & toll was 16%. The increase on YoY basis was relatively higher on account of low base affect in Q1 FY22 due to lower business volumes caused by COVID impact.
AUM of wealth management business has grown 92% YoY to reach Rs 6,693 crore as on 30 June 2022.
Total income during the quarter increased by 17% YoY to Rs 5,777 crore.
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Core operating profit (excluding trading gains) grew by 64% YoY basis to Rs 987 crore for the quarter Q1 FY23 from Rs 601 crore in Q1 FY22.
Provisions for the quarter aggregated at Rs 308 crore in Q1 FY23 as compared to Rs 1,872 crore in Q1 FY22, a reduction of 84% on a YoY basis. The credit cost (quarterly annualized) as percentage of average funded assets for Q1 FY23 was 0.9%.
"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 credit cost guidance for FY23 at approximately 1.5% on funded assets, IDFC First Bank said in a statement.
The bank's gross non-performing assets (NPAs) stood at Rs 4,355 crore as on 30 June 2022 as against Rs 4,469 crore as on 31 March 2022 and Rs 4,667 crore as on 30 June 2021.
The ratio of gross NPAs was 3.36% as on 30 June 2022 as against 4.61% as of 30 June 2021. The ratio of net NPAs was 1.30% as on 30 June 2022 as compared with 2.32% as on 30 June 2021.
We see that the impact of COVID second wave is gradually diminishing and this improvement is showing in the above improvement in asset quality. Excluding legacy infrastructure loans (which will be run down in due course), the Gross and Net NPA of the Bank would have been 2.39% and 0.80%, respectively. The overall restructured book reduced to 1.3% as on June 30, 2022 of the funded assets as against 1.8% as on March 31, 2022, the private lender said.
The bank's customer deposits increased by 21% to Rs 1,02,868 crore as of 30 June 2022 as compared to Rs 84,893 crore as of 30 June 2021. Funded assets grew by 21% YoY to reach Rs 1,37,663 crore as of 30 June 2022.
Capital adequacy of the bank was strong at 15.77% with CET-1 Ratio at 14.01% as on 30 June 2022. Average LCR was strong at 128% for the quarter ending on 30 June 2022.
V Vaidyanathan, managing director and CEO, IDFC FIRST Bank, said, We have built a strong foundation for the bank, on the basis of which we can grow the loan book, deposits and profits comfortably from here on in a steady manner.
We have seen a steady growth of over 20% YoY, both on the lending side as well as the deposits side in Q1 FY23. Our return on assets has nearly touched 1% and we expect it to rise from here.
We are happy that even post the pandemic, our retail Gross NPA and Net NPA has reverted to 2.1% and 0.9% respectively which is our long-term experience. More importantly, the retail asset quality has normalized sooner than our earlier guidance of March 2023.
IDFC First Bank was formed by the merger of erstwhile IDFC Bank and Capital First. As on 30 June 2022, the bank has 651 branches and 807 ATMs across the country.
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