IDFC First Bank posts highest ever net profit at Rs 474 cr in June quarter
IDFC First Bank on Saturday announced its highest ever net profit of Rs 474 crore for the quarter ended June 2022, mainly due to lower provisioning and higher income.
The private sector lender had recorded a net loss of Rs 630 crore in the prior year quarter.
Sequentially, net profit increased by 38.2% from Rs 343 crore in the March 2022 quarter.
“We recorded the highest ever after-tax profit of Rs 474 crore in the first quarter of FY23. Our return on assets has almost reached 1% and we expect it to increase from ‘here,” said V Vaidyanathan, Managing Director and CEO, IDFC FIRST Bank.
The bank’s total income in the April-June 2022-23 period also reached Rs 5,777.35 crore compared to Rs 4,931.76 crore in the same period of 2021-2022, IDFC First said. Bank in a regulatory file.
Basic interest income increased by 20.4% to Rs 4,921.68 crore from Rs 4,089.29 crore. Revenue from other sources increased slightly by 1.6% to Rs 855.67 crore from Rs 842.47 crore.
The bank’s asset quality has improved, with gross non-performing assets (NPA) falling to 3.36% of gross advances in the June quarter of 2022 from 4.61% a year ago.
In absolute terms, gross NPA (or bad debts) fell to Rs 4,354.75 crore from Rs 4,669.13 crore.
Net NPAs also fell to Rs 1,653.82 crore (1.30%) from Rs 2,293.18 crore (2.32%).
This helped the lender reduce the requirement to be set aside for provisions and contingencies to Rs 307.99 crore for the quarter from Rs 1,872.31 crore a year ago.
Core operating profit (excluding trading gains) rose 64% to Rs 987 crore in the June 2022 quarter, the bank said.
Among other things, the bank’s net interest income (interest earned minus interest spent) increased by 26% to Rs 2,751 crore in Q1FY23. In addition, the net interest margin improved from 5.50% to 5.89%.
The lender said its business portfolio (excluding infrastructure) increased by 12% to Rs 23,970 crore, while infrastructure financing fell by 35% to Rs 6,739 crore.
On key ratios, capital adequacy was strong at 15.77% as of June 30, 2022, the bank said. The average liquidity coverage ratio (LCR) was 128%.
Vaidyanathan said the bank has built a solid foundation on which it can now comfortably grow the loan portfolio, deposits and profits on a steady basis.
“We saw steady growth of over 20% year-over-year on both the lending and deposit side in Q1FY23. Our non-cash core operating profit increased by 64% to nearly Rs 1,000 crore, which is a key milestone for us,” he said.