IDFC First Bank has reported a 32% YoY decline in its profit after tax (PAT) at Rs 463 crore in the first quarter of the financial year 2026, while the net interest income ( NII) witnessed a growth of 5.1% YoY to Rs 4,933 crore in the same period.
The NII is comparable to Rs 4,695 crore in the first quarter of the last financial year. However, on a quarter-on-quarter basis, the PAT grew 52.1%.
The bank's Net Interest Margin (NIM) on AUM dropped by 24 basis points quarter-on-quarter, falling from 5.95% in Q4 FY25 to 5.71% in Q1 FY26. This decline was mainly due to the impact of repo rate changes, a shift in the asset mix, including a sharp fall in the microfinance segment, and lower investment yields.
Operating profit (excluding trading gains) declined by 6.2% YoY, from Rs 1,858 crore in Q1 FY25 to Rs 1,744 crore in Q1 FY26. However, on a sequential basis, it rose by 7.8%.
The bank reported robust growth in its deposit base for the quarter ended June 30, 2025. Customer deposits rose 25.5% year-on-year to Rs 2,56,799 crore, compared to Rs 2,04,572 crore a year ago.
Retail deposits grew 24.5% to Rs 2,04,222 crore, while CASA deposits surged 30.2% to Rs 1,27,158 crore. The CASA ratio improved to 48% from 46.6% in the same period last year. Retail deposits accounted for 80% of the total customer deposits as of the end of the quarter.
IDFC First Bank reported a stable asset quality profile for the quarter ended June 30, 2025, even as the microfinance sector faced rising delinquencies. The bank is monitoring its microfinance portfolio closely, while provisions for the rest of the book remain steady.
Gross NPA stood at 1.97% as of June 30, 2025, slightly higher than 1.87% in the previous quarter. Net NPA was at 0.55%, compared to 0.53% as of March 31, 2025. Gross NPA of the Retail, Rural, and MSME book rose to 1.82% from 1.70% sequentially.
IDFC First Bank reported a 21% YoY growth in loans and advances, reaching Rs 2,53,233 crore as of June 30, 2025, compared to Rs 2,09,361 crore a year ago. The growth was largely driven by mortgage loans, vehicle loans, business banking, MSME loans, and wholesale loans, which together accounted for 82% of the total incremental loan growth.
The Retail, Rural, and MSME segment grew by 17.4% YoY to Rs 2,03,954 crore. Meanwhile, the wholesale book expanded significantly by 38.6%, rising from Rs 35,564 crore to Rs 49,279 crore.
On the other hand, the microfinance portfolio declined by 36.9% YoY, with its share in the total loan book falling from 6.3% to 3.3% over the same period.
IDFC First Bank reported total provisions of Rs 1,659 crore for the quarter ended June 30, 2025, primarily due to slippages in the microfinance segment. Excluding microfinance and a legacy infrastructure toll account, the credit cost for the overall loan book stood at 2% in Q1 FY26, up from 1.8% in FY25, largely due to seasonality.
The bank maintained a prudent approach and did not draw from its Rs 315 crore microfinance provision buffer during the quarter. Additionally, incremental disbursements in the microfinance segment are insured by CGFMU, with 72% of the outstanding portfolio covered as of June 30, 2025.
IDFC First Bank reported a Capital Adequacy Ratio (CAR) of 15.01% for Q1 FY26, including quarterly profits, with the Common Equity Tier-I (CET-I) ratio at 12.80% as of June 30, 2025.
Post the proposed capital raise of Rs 7,500 crore and upon equity conversion, the CRAR and CET-I ratios are projected to rise to 17.60% and 15.38%, respectively, based on the Q1 FY26 financials.
The bank’s Managing Director and CEO, V Vaidyanathan, informed that the bank’s margins reduced because it passed on the benefit of repo rate to eligible borrowers and an asset mix change.
Still, the term deposits broadly would take a year to reprice downwards. So, by H2 FY26, margins are likely to be better.
Also, by H2 FY26, the bank anticipates that the MFI issue should largely be behind it. The bank also emphasized that its customer franchise is strong and all-in-all, it is well-positioned for the future.
On Friday, the shares of IDFC First Bank closed 3% lower at Rs 70.70 on the BSE.
The NII is comparable to Rs 4,695 crore in the first quarter of the last financial year. However, on a quarter-on-quarter basis, the PAT grew 52.1%.
The bank's Net Interest Margin (NIM) on AUM dropped by 24 basis points quarter-on-quarter, falling from 5.95% in Q4 FY25 to 5.71% in Q1 FY26. This decline was mainly due to the impact of repo rate changes, a shift in the asset mix, including a sharp fall in the microfinance segment, and lower investment yields.
Operating profit (excluding trading gains) declined by 6.2% YoY, from Rs 1,858 crore in Q1 FY25 to Rs 1,744 crore in Q1 FY26. However, on a sequential basis, it rose by 7.8%.
The bank reported robust growth in its deposit base for the quarter ended June 30, 2025. Customer deposits rose 25.5% year-on-year to Rs 2,56,799 crore, compared to Rs 2,04,572 crore a year ago.
Retail deposits grew 24.5% to Rs 2,04,222 crore, while CASA deposits surged 30.2% to Rs 1,27,158 crore. The CASA ratio improved to 48% from 46.6% in the same period last year. Retail deposits accounted for 80% of the total customer deposits as of the end of the quarter.
IDFC First Bank reported a stable asset quality profile for the quarter ended June 30, 2025, even as the microfinance sector faced rising delinquencies. The bank is monitoring its microfinance portfolio closely, while provisions for the rest of the book remain steady.
Gross NPA stood at 1.97% as of June 30, 2025, slightly higher than 1.87% in the previous quarter. Net NPA was at 0.55%, compared to 0.53% as of March 31, 2025. Gross NPA of the Retail, Rural, and MSME book rose to 1.82% from 1.70% sequentially.
IDFC First Bank reported a 21% YoY growth in loans and advances, reaching Rs 2,53,233 crore as of June 30, 2025, compared to Rs 2,09,361 crore a year ago. The growth was largely driven by mortgage loans, vehicle loans, business banking, MSME loans, and wholesale loans, which together accounted for 82% of the total incremental loan growth.
The Retail, Rural, and MSME segment grew by 17.4% YoY to Rs 2,03,954 crore. Meanwhile, the wholesale book expanded significantly by 38.6%, rising from Rs 35,564 crore to Rs 49,279 crore.
On the other hand, the microfinance portfolio declined by 36.9% YoY, with its share in the total loan book falling from 6.3% to 3.3% over the same period.
IDFC First Bank reported total provisions of Rs 1,659 crore for the quarter ended June 30, 2025, primarily due to slippages in the microfinance segment. Excluding microfinance and a legacy infrastructure toll account, the credit cost for the overall loan book stood at 2% in Q1 FY26, up from 1.8% in FY25, largely due to seasonality.
The bank maintained a prudent approach and did not draw from its Rs 315 crore microfinance provision buffer during the quarter. Additionally, incremental disbursements in the microfinance segment are insured by CGFMU, with 72% of the outstanding portfolio covered as of June 30, 2025.
IDFC First Bank reported a Capital Adequacy Ratio (CAR) of 15.01% for Q1 FY26, including quarterly profits, with the Common Equity Tier-I (CET-I) ratio at 12.80% as of June 30, 2025.
Post the proposed capital raise of Rs 7,500 crore and upon equity conversion, the CRAR and CET-I ratios are projected to rise to 17.60% and 15.38%, respectively, based on the Q1 FY26 financials.
The bank’s Managing Director and CEO, V Vaidyanathan, informed that the bank’s margins reduced because it passed on the benefit of repo rate to eligible borrowers and an asset mix change.
Still, the term deposits broadly would take a year to reprice downwards. So, by H2 FY26, margins are likely to be better.
Also, by H2 FY26, the bank anticipates that the MFI issue should largely be behind it. The bank also emphasized that its customer franchise is strong and all-in-all, it is well-positioned for the future.
On Friday, the shares of IDFC First Bank closed 3% lower at Rs 70.70 on the BSE.
You may also like
Gatwick Airport: Fire engines swarm runway as easyJet plane forced to divert
Calandagan's trainer admits relief at win in surprising King George at Ascot
Parents' Day 2025: Why More Couples Are Choosing To Become Pet Parents
'Weapons made in India unsettle terrorism's masters': PM Modi hails indigenous arms in Operation Sindoor; pushes for manufacturing and economic growth
Danny Jones' emotional chat with wife Georgia as he opens up on 'hurt and trauma'
