IDFC FIRST Bank Q2 Results: Sharp Rise In Provision Weighs On Net Profit

A sharp rise in provisions weighed on the net profit of IDFC FIRST Bank for the quarter ended September to Rs 201 crore, down over 73% on year.

The earnings of the bank were impacted by prudent provisions of Rs 568 crore including Rs 315 crore in the microfinance institution business which has been witnessing stress. The bank also made provisions of Rs 253 crore in one Maharashtra-based toll account, according to the notification sent to the exchanges on Saturday.

During Jul-Sep, provisions of the bank were Rs 1,732 crore against Rs 528 crore a year ago.

Net interest income of the bank grew 21% on year Rs 4,788 crore. Consequently, net interest margins were 6.20% at the end of September against 6.22% a quarter ago.

Healthy growth in the bank's loan book and largely stable asset quality aided the bank's performance.

Advances increased by 22% on year to Rs 2.22 lakh crore. This was led by a 25% growth in retail loans and a 20% increase in loans to corporates. While the retail book grew by 25% on year, corporate loans rose 20%.

The bank’s legacy infrastructure book reduced by 21% on year and the microfinance portfolio as a percentage of overall loan book decreased to 5.6% from 6.3% a quarter ago.

Deposits increased by 32.4% on year to Rs 2.18 lakh crore. The current account and savings account ratio of the bank was 48.9% at the end of September.

Gross non-performing assets ratio of the bank rose to 1.92% at the end of September from 1.90% a quarter ago but was lower than 2.11% a year ago. Net NPA declined to 0.48% compared with 0.59% a quarter ago and 0.68% a year ago.

During Jul-Sep, the early bucket collection efficiency in the retail book excluding microfinance remained stable at 99.5%, the bank said. In the microfinance book, collection efficiency reduced to 98.6% from 99.0% a quarter ago.