The profit was largely impacted by reduced income from slowing down disbursal of micro-finance loans, increase in provisions on micro-finance and normalization of credit costs of non-microfinance business.
However, total income during the quarter increased by 18.38% YoY to Rs 11,122.87 crore.
Core operating profit (excluding trading gain) grew by 15% YoY to Rs 1,515 crore in the third quarter of FY25.
Net interest income (NII) grew 14% YoY to Rs 4,287 crore during the quarter. Net interest margin (NIM) reduced to 6.04% for Q3 FY25, compared to 6.18% in Q2 FY25 largely due to decline in the micro-finance business and increase in composition of wholesale banking business.
Customer deposits increased by 28.8% YoY to Rs 2,27,316 crore as of 31 December 2024 from Rs 1,76,481 crore as of 31 December 2023. Retail deposits grew by 29.6% YoY to Rs 1,80,752 crore as of 31 December 2024 from Rs 1,39,431 crore as of 31 December 2023.
CASA Deposits grew by 32.3% YoY to Rs 1,13,078 crore as of 31 December 2024 from Rs 85,492 crore as of 31 December 2023. CASA Ratio stood at 47.7% as of 31 December 2024.
Loans and advances (including credit substitutes) increased by 22% YoY to Rs 2,31,074 crore as of 31 December 2024 from Rs 1,89,475 crore as of 31 December 2023. The retail book of the bank grew by 21.3% YoY while the corporate (non-infrastructure) loans grew by 28.9% YoY during the quarter.
Microfinance portfolio as per cent of overall loan book reduced to 4.8% in the December 2024 quarter from 5.6% in the September 2024 quarter.
Gross NPA was 1.94% as of 31 December 2024 as against 2.04% as of 31 December 2023. Net NPA was 0.52% as of 31 December 2024, compared to 0.68% as of 31 December 2023.
The gross slippage for Q3-FY25 was Rs 2,192 crore as compared to Rs 2,031 crore in Q2 FY 2025, an increase of Rs 162 crore. Majority of the increase in slippage during Q3FY25 was from the micro-finance business which constituted Rs 143 crore out of the said Rs 162 crore. Hence, gross slippage on the Retail, MSME, Agri and Corporate Loans, i.e the non-microfinance business was stable. These businesses constituted
95% of the total book of the Bank.
V Vaidyanathan, managing director and CEO, IDFC First Bank, said, “Our bank continues to grow well on loans and deposits. We are specifically tracking Micro-finance loan book closely considering the industry situation. The asset quality of the overall Bank’s loan book is stable with Gross NPA at 1.94% and Net NPA at 0.52%. Excluding the micro-finance loan book, the GNPA and NNPA of the book of the bank is even lower 1.81% and 0.49%.
The credit issues in Microfinance segment as a transitionary issue which is likely to be resolved within a few quarters. The Bank built this business because it was important from priority sector lending norms point of view, particularly meeting PSL norms for Weaker Sections and Small and marginal farmers PSL categories.
All other businesses being built as part of universal banking, including deposits, loans, Credit Cards, Wealth, Cash Management, Corporate Banking, Fastag, Gold Loans are doing well. Over the next few years, the C:I will come down because of operating leverage, as we scale up. As mentioned earlier, the bank is growing steadily in scale.”
IDFC Bank is a universal bank, offering financial solutions through its nationwide branches, Internet and mobile. The bank provides customized financial solutions to corporate, individuals, small and micro enterprises (SMEs), entrepreneurs, financial institutions and the government.