IDFC FIRST Bank expects its stronger earnings momentum to broadly continue through the 2026\u201327 financial year after reporting a record profit of \u20b91,075 crore for the April-to-June quarter, supported by lower funding costs, improving asset quality and reduced credit provisions. Managing director and chief executive V. Vaidyanathan said the improvement came primarily from two factors: provisions declined as loan repayments and portfolio performance remained healthy, while income benefited from an approximately 45-basis-point fall in the bank\u2019s cost of funds. The official Q1 FY27 results showed profit after tax rising 132.4% from a year earlier, while core operating profit increased 36% to \u20b92,371 crore. The cost of funds stood at 5.96%, down 46 basis points year-on-year, reflecting the bank\u2019s continued shift towards a stronger retail-deposit franchise and lower-cost current and savings accounts. Total deposits reached nearly \u20b93.12 lakh crore, with the CASA ratio improving to 50.8%, while total loan assets, including credit substitutes, crossed \u20b93.05 lakh crore. Asset-quality indicators also strengthened, with the gross non-performing asset ratio declining to 1.51% and the net NPA ratio falling to 0.44%. Vaidyanathan said the bank did not currently see signs of fresh stress in its broader loan portfolio, although management had voluntarily created a contingency provision of approximately \u20b9515 crore to protect against possible risks arising from geopolitical uncertainty, oil-price movements and an unfavourable monsoon. This provision should therefore not be interpreted as confirmation of an existing loan-quality problem, but as a precaution against conditions that could affect borrowers later in the year. The bank\u2019s credit cost, which includes provisions and write-offs as a share of loans, was 2.13% in the previous financial year, slightly above its guidance of 2.10%, largely because of industry-wide stress in microfinance. For FY27, management is targeting a lower credit cost of approximately 1.5% to 1.6%, which could materially improve profitability across a loan book of around \u20b93 lakh crore if asset quality remains stable. The bank is also gradually increasing its exposure to products carrying relatively lower default risks, including mortgages, vehicle finance, secured working-capital loans and corporate lending, while continuing to serve micro-enterprises, small retailers and rural borrowers. Its reported net interest margin was 5.96% in the first quarter, although management said the underlying figure was closer to 5.9% after removing the effect of an income-tax refund and expects the full-year margin to remain near 5.8%. IDFC FIRST Bank is additionally rebuilding its wholesale-banking business after reducing corporate exposure during the years following its transition from a development-finance institution, with the longer-term ambition of operating as a full universal bank serving large companies, small businesses and retail customers. While falling costs and provisions have created a favourable earnings outlook, the sustainability of the record profit will still depend on deposit pricing, credit growth, microfinance recovery, economic conditions and the absence of new stress from external risks.<\/p>\n","protected":false},"excerpt":{"rendered":"
IDFC FIRST Bank expects its stronger earnings momentum to broadly continue through the 2026\u201327 financial year after reporting a record profit of \u20b91,075 crore for the April-to-June quarter, supported by lower funding costs, improving asset quality and reduced credit provisions. Managing director and chief executive V. Vaidyanathan said the improvement came primarily from two factors: […]<\/p>\n","protected":false},"author":1,"featured_media":2599,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"om_disable_all_campaigns":false,"_monsterinsights_skip_tracking":false,"tdm_status":"","tdm_grid_status":"","footnotes":""},"categories":[8],"tags":[],"class_list":["post-2609","post","type-post","status-publish","format-standard","has-post-thumbnail","category-biusinessfinance"],"_links":{"self":[{"href":"https:\/\/todaynewshours.com\/index.php?rest_route=\/wp\/v2\/posts\/2609","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/todaynewshours.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/todaynewshours.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/todaynewshours.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/todaynewshours.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=2609"}],"version-history":[{"count":1,"href":"https:\/\/todaynewshours.com\/index.php?rest_route=\/wp\/v2\/posts\/2609\/revisions"}],"predecessor-version":[{"id":2610,"href":"https:\/\/todaynewshours.com\/index.php?rest_route=\/wp\/v2\/posts\/2609\/revisions\/2610"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/todaynewshours.com\/index.php?rest_route=\/wp\/v2\/media\/2599"}],"wp:attachment":[{"href":"https:\/\/todaynewshours.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=2609"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/todaynewshours.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=2609"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/todaynewshours.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=2609"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}