IDFC First Bank announced Q3FY25 earnings on January 25 (Saturday), reporting a sharp drop of 53 percent in standalone net profit to ₹339.4 crore, dragged by increased provisions due to higher loan slippages, compared to ₹715.7 crore in the corresponding period last year.
The private sector lender was formed by merging the banking arm of project finance Infrastructure Development Finance Company (IDFC) and Capital First.
The bank said its profit was impacted by reduced income from slowing down the disbursal of micro-finance (MF) loans, an increase in microfinance provisions, and the normalization of credit costs of non-MF businesses.
IDFC First Bank Q3 Results: Key Metrics
IDFC First Bank’s net interest income (NII)—the difference between interest earned and paid—rose 14.4 percent to ₹4,902 crore compared to ₹4,286.6 crore in the year-ago period. The total income increased to ₹11,123 crore during the quarter from ₹9,396 crore in the same period a year ago.
Sequentially, the net profit grew by 69 percent from ₹201 crore in the preceding September quarter of FY25. The 9M-FY25 net profit decreased by 45.3 percent on a year-on-year (YoY) basis. Customer deposits increased 28.8 percent YoY from Rs. 1,76,481 crore as of December 31, 2023, to Rs. 2,27,316 crore as of December 31, 2024.
Loans and Advances (including credit substitutes) increased by 22 percent YoY from Rs. 1,89,475 crore as of December 31, 2023, to Rs. 2,31,074 crore as of December 31, 2024. Microfinance portfolio as a percentage of overall loan book reduced from 5.6 percent in Q2FY25 to 4.8 percent in the December quarter.
“Our bank continues to grow well on loans and deposits. Our customer deposits are growing strongly at 29 percent YoY to reach Rs. 2,27,316 crore, with the CASA ratio sustaining at 48 percent. The loans and advances grew steadily by 22 percent YoY to reach Rs. 2,31,074 crore,” said V Vaidyanathan, MD and CEO of IDFC First Bank.
Market Reaction
Following the announcement of these results, IDFC First Bank’s shares experienced a notable decline of approximately 7%, reaching a 21-month low. Analysts have expressed caution regarding the bank’s performance moving forward, particularly due to ongoing challenges within its microfinance segment.
Brokerages have indicated that this weakness may persist in the coming quarters.