Mr. V Vaidyanathan, Managing Director and CEO, IDFC FIRST Bank, said, “We are happy to share that our core operating profit for Q4 22 has more than doubled (up 106%) to Rs. 836 crore as compared to Rs. 405 crore in Q4 FY 21. This shows the power of the business model we are building. Our PAT is up 168% YoY from Rs. 128 crore to Rs. 343 crore.
In the retail business, which is one of the key drivers of growth, NPA continues to reduce since the last 4 quarters. Our Retail Gross NPA sharply reduced from 4.01% in FY 21 to 2.63% in FY 22, and Net NPA reduced from 1.90% in FY 21 to 1.15% in FY 22. Based on internal analysis, we are comfortably on our way to reduce retail GNPA and NNPA to 2% and less than 1% respectively as guided earlier.
Key Highlights of the IDFC First Bank Results
- NII grew by36% on a YoY basis to reach Rs. 2,669 crore in Q4-FY22.
- Net Interest Margin improved to 6.27% in Q4-FY22.
- Fee and Other Income grew by 40%YoY to reach Rs. 841 crore in Q4 FY22
- Core operating income (excl. trading gains)grew by 37% YoY to Rs. 3,510 crore in Q4-FY22
- Core operating profit (excl. trading gains) grew by 106%YoY to reach Rs. 836 crore
- Provisions other than tax were lower by 36% YoY basis at Rs. 369 crore in Q4-FY22
- Net Profit grew by 168% YoY basis to reach Rs. 343 crore in Q4-FY22
- Customer Deposits: Grew by 13% YoY to reach Rs. 93,214 crore
- CASA ratio: 48.44% as of March 31, 2022. The average CASA Ratio for FY22 was 49.88%.
- Funded Assets: Grew by 13%YoY to reach Rs. 1,31,951 crore. Retail Loans and Commercial loans grew by 26% YoY to reach Rs. 95,377 crore, primarily driven by growth in Home Loans which grew by 52% YoY
- Infrastructure Financing was reduced by 36%YOY to reach Rs. 6,891 crore (reduced to 5.2% of funded assets). All spectrum-related Bank Guarantees issued by the Bank have been released.
- Asset quality at Bank Level: GNPA and NNPAreduced by 45 bps and 33 bps YoY to reach 3.70% and 1.53% respectively.
o PCR (including technical write-offs) increased from 63.57% as at March 31, 2021 to 70.29% at Mar 31, 2022 to further strengthen the balance sheet.
- Gross and Net NPA of Retail and Commercial Financereduced to 2.63% (reduction of 138 bps YOY) and 1.15% (reduction of 75 bps YOY) respectively.
o Collection Efficiency: Early bucket collection efficiency in Retail surpassed Pre-COVID levels for both urban and rural retail loans.
Capital Adequacy & Liquidity
- Capital Adequacy Ratio: Strong at 16.74%,CET-1 Ratio at 14.88%, YoY growth of 297 bps.
- Average Liquidity Coverage Ratio(LCR): Strong at 136% for Q4-FY22.
Whether savings accounts where we offer monthly credit of interest, or credit cards where we offer low APR and no annual or joining fees with easy redemption of rewards points, we have something special in our product offerings to customers. With this Customer First approach, coupled with our strong digital capabilities we are adding millions of new customers every year.
For the first three years after the merger, we grew the retail deposits base (3 year CAGR of 72%), and slowed down the loan growth (3 year CAGR only 6%) to strengthen the foundation. Now that our CASA is ~50%, we can comfortably grow our loan book between 20- 25% compounded for the next three years. This will give us strong operating leverage and growth and profitability. Our capital adequacy is strong at 16.74%.”