October 28, 2018, Mumbai (Maharashtra), India: Quick look at the financial results: It was accepted by the Board of Directors of IDFC FIRST Bank today that the financial figures for the quarter and half year ending September 30, 2024, were correct without being inspected.

Deposits and loans

– Year over year, customer deposits rose by 32.4%, rising from Rs. 1,64,726 crore on September 30, 2023, to Rs. 2,18,026 crore on September 30, 2024.

– From September 30, 2023, to September 30, 2024, retail deposits rose by 37.4% year over year, from Rs. 1,27,595 crore to Rs. 1,75,300 crore.

– From September 30, 2023, to September 30, 2024, CASA Deposits rose by 37.5% year over year, from Rs. 79,468 crore to Rs. 1,09,292 crore.

– As of September 30, 2024, the CASA Ratio was 48.9%.

– As of September 30, 2024, 80.4% of all customer deposits were in retail accounts.

For the Bank, the Cost of Funds was 6.46% in Q2-FY25, which was a little better than the previous quarter. If you take out the expensive old loans, the cost of funds in Q2 FY25 was 6.37%.

Payment and Fee Companies

Credit cards were given out more than 3 million times in the last quarter. The credit card business’s cost-to-income ratio keeps going down, but it’s going up. In Q2 FY25, it was 99.8%, down from 104.1% in Q1 FY25.

-The bank’s Wealth Management AUM went over Rs. 20,000 crore in the second quarter of FY25.

As of now, the Bank is still the biggest FASTag provider, with 20 million tags already given out.

Loans and cash advances

Credit substitutes and loans went up by 21.5% year over year, from Rs. 1,83,236 crore on September 30, 2023, to Rs. 2,22,613 crore on September 30, 2024.

During the quarter, the bank’s customer loans grew by 25% year over year, while its business loans (not infrastructure loans) grew by 20% year over year.

– As of September 30, 2024, the Bank’s long-term infrastructure book dropped by 21% year over year to Rs. 2,654 crore, which is 1.2% of the Bank’s total funded assets.

– The microfinance portfolio as a percentage of all loans dropped from 6.3% in June 2024 to 5.6% in September 2024.

Quality of Assets

Gross NPA was 1.92% on September 30, 2024, down from 2.11% the previous year.

-As of September 30, 2024, net NPA was 0.48%, down from 0.68% the previous year.

– The Retail, Rural, and MSME Finance had a Gross NPA of 1.57% as of September 30, 2024, down from 1.53% as of September 30, 2023.

As of September 30, 2023, the Retail, Rural, and MSME Finance had a net non-performing asset (NPA) of 0.52%. As of September 30, 2024, it was 0.53%.

As of September 30, 2024, the Bank’s GNPA would have been 1.66% and its NNPA would have been 0.47% if the infrastructure lending book, which the Bank is closing down, had not been taken into account.

– The bank’s PCR went up from 68.18% on September 30, 2023, to 75.27% on September 30, 2024. It had been 69.38% on June 30, 2024.

– How well collections work:

-The early bucket collection rate for the store book, excluding MFI, stayed the same at 99.5%.

– The Microfinance book’s collection rate dropped from 99.0% in Q1-FY25 to 98.6% in Q2-FY25.

– Positions in SMA:

If you take out the microfinance book, the SMA-1+2 in the Retail, Rural, and MSME Finance portfolio went up from 0.95% on June 30, 2024, to 0.87% on September 30, 2024.

– The SMA-1+2 rates in the lending business rose from 1.7% on June 30, 2024, to 2.5% on September 30, 2024.

– The CGFMU gives microfinance businesses more insurance over time. In just 9 months, the portfolio’s insurance coverage went from 0% to 50%, and it’s expected to reach 75% by March 2025.

What’s included:

– Provisions for the second quarter of FY25 were Rs. 1,732 crore, mostly because of a smart planning buffer of Rs. 568 crore that was set up for

The MFI business is worth Rs. 315 crore. About 99% of the SMA-1+2 portfolio is covered. As of September 2024, it makes up 2.5% of the whole inventory in this business area.

b. One legacy toll account (Rs. 253 cr). Effects on the borrower of infrastructure because toll fees on LMV of State Government-recognized trucks were taken away. Could be put back to the bank’s profit if the government pays the client back.

– The loan costs for Q2 of FY25 would be about 1.8% if not for the MFI business and toll account that was stated above.

Making money

– From Rs. 3,950 crore in Q2 FY24 to Rs. 4,788 crore in Q2 FY25, Net Interest Income (NII) increased by 21% year over year.

– From Rs. 1,376 crore in Q2 FY24 to Rs. 1,622 crore in Q2 FY25, fee and other income grew by 18% year over year.

– In Q2 FY25, operating income was Rs. 6,515 crore, up 21% from Rs. 5,380 crore in Q2 FY24.

Operating costs rose by 18% year over year, from Rs. 3,870 crore in Q2 FY24 to Rs. 4,553 crore in Q2 FY25.

In the second quarter of fiscal year 25 (Q2 FY25), core operating profit rose by 28% year over year, from Rs. 1,456 crore in Q2 FY24 to Rs. 1,857 crore. Taking into account trading gains, Core Operating Profit went up by 30% year over year.

– Net Profit dropped 73% year over year, from Rs. 751 crore in Q2 FY24 to Rs. 201 crore in Q2 FY25. This was mostly because of higher provisions for the Microfinance book and the infrastructure toll account.

– The adjusted Profit after Tax would have been Rs. 626 crore if the extra reserve on the toll account and the micro-finance business were taken out.

Position of Capital

– In July 2024, the Bank was able to get Rs. 3,200 crore in new stock capital from well-known local institutional investors.

– The Bank also successfully merged with IDFC Ltd in October 2024, which added Rs. 618 crore to its net worth and lowered the number of shares that were outstanding by 16.64 crore.

—Taking into account the profits from Q2 FY25 and the effects of the merger we talked about above, the overall CRAR on September 30, 2024, would have been 16.60%, with a CET-1 ratio of 14.08%.

Thoughts from the CEO and Managing Director

Director and CEO of IDFC FIRST Bank, Mr. V Vaidyanathan, said,

“Our main goals are strong.” Strong increase in savings is due to our name, technology, and high levels of service. Growth in savings is one of the Bank’s main strategy strengths. Deposits grew a healthy 32% year over year. Our CASA share stayed the same at 48.9%.

Our general loan growth has stayed at 21.5% year over year. Things changed in the lending business, just like they do in every other field. The payments made by MFI are now covered by CGFMU as of January 2024. As of now, 50% of the book is covered, and that number will rise to 75% by the end of March 2025.

The quality of the assets as a whole stayed mostly the same, with Gross NPA at 1.92% and Net NPA at 0.48%.

The PCR we have now is 75% better.

As a safety step, we’ve added an extra funding balance of Rs. 315 crore for the lending sector. Bank has set aside an extra Rs. 253 crore for one toll road that leads to Mumbai’s entry point and was hit when the State government waived the toll on LMV. The bank will count this as a profit if the tolls are collected and the government pays the client back.

We shared the SMA 1+2 rates and trends for each product category this quarter. Except for the MFI business, SMA 1 and 2 have gotten better QoQ.

The company made 28% more money than it did the year before, or Rs. 1,857 crore, in Core Operating Profit, which does not include trade gains.

Our core working success is strong, and we’re sure that we can get back to making money in the future.