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IDFC FIRST Bank reported a sharp 58 percent fall in its net profit for the fourth quarter of FY25, posting Rs 304 crore compared to Rs 724 crore in Q4 FY24. The decline was mainly due to high provisions linked to stress in the bank’s microfinance portfolio. For the full year FY25, the net profit stood at Rs 1,525 crore, reflecting a 48.
4 percent drop year-on-year. Despite the pressure on profitability, customer deposits showed strong growth, rising 25.2 percent year-on-year to Rs 2,42,543 crore.
Retail deposits also grew by 26.4 percent, reaching Rs 1,91,268 crore. CASA deposits increased by 24.
8 percent to Rs 1,18,237 crore. The CASA ratio stood firm at 46.9 percent, only slightly lower than 47.
2 percent recorded last year. The bank’s total Loans and Advances rose 20.4 percent year-on-year to Rs 2,41,926 crore.
Retail, Rural, and MSME loans grew by 18.6 percent to Rs 1,97,568 crore, but the microfinance portfolio shrank by 28.3 percent.
Net Interest Income (NII) for Q4 FY25 grew by 9.8 percent year-on-year to Rs 4,907 crore. For the full year, NII rose by 17.
3 percent. The Net Interest Margin (NIM) on Assets Under Management (AUM) stood at 5.95 percent for Q4, down 9 basis points sequentially due to a fall in the microfinance business.
The full-year NIM was recorded at 6.09 percent. Fee and Other Income rose 5.
7 percent year-on-year to Rs 1,702 crore during the quarter. For the entire FY25, this income stream grew by 15.2 percent.
Core Operating Income increased by 8.7 percent to Rs 6,609 crore, while Operating Expenses climbed by 12.2 percent to Rs 4,991 crore.
Core Operating Profit for the quarter was Rs 1,618 crore, with the full-year figure rising by 17.2 percent to Rs 7,069 crore. The bank maintained stable asset quality despite challenges.
Gross Non-Performing Assets (GNPA) improved by 7 basis points sequentially to 1.87 percent, while Net NPA rose slightly by 1 basis point to 0.53 percent.
Excluding the microfinance book, GNPA for the Retail, Rural, and MSME segment improved to 1.40 percent. The Provision Coverage Ratio (PCR) remained strong at 72.
3 percent. Total provisions for FY25 amounted to Rs 5,515 crore, accounting for 2.46 percent of the loan book.
When excluding microfinance and one toll account, the adjusted credit cost for the year was 1.76 percent, with an improvement of 9 basis points quarter-on-quarter to 1.73 percent in Q4.
Gross slippages during Q4 FY25 were Rs 2,175 crore, slightly down from Rs 2,192 crore in Q3. In a significant move, IDFC FIRST Bank’s board approved raising approximately Rs 7,500 crore by issuing Compulsorily Convertible Preference Shares (CCPS) to affiliates of Warburg Pincus and Abu Dhabi Investment Authority (ADIA), subject to shareholder and regulatory approvals. The board also proposed a dividend of Rs 0.
25 per share. Commenting on the performance, V Vaidyanathan, Managing Director and CEO, said, “Our customer deposits grew well at 25 percent year-on-year and the CASA ratio continues to remain strong at 46.9 percent, reflecting the strength of our deposit franchise.
Our funded asset book grew by 20.4 percent. Importantly, the Bank’s asset quality remains resilient, with GNPA and NNPA at 1.
87 percent and 0.53 percent respectively,” as reported by media. ALSO READ: Is A Zero Balance Saving Account The Best Choice For Flexible, Rewarding, And Convenient Banking?.
