IDFC Bank on Saturday reported its highest ever net profit at Rs 474 crore for the quarter ended June 2022, mainly on lower provisions and higher revenue.
The private sector lender posted a net loss of Rs 630 crore in the year-ago quarter.
On a sequential basis, net profit rose 38.2 percent from Rs 343 crore in the March 2022 quarter.
“In the first quarter of FY23, we recorded our highest profit after tax at INR 474 crore. Our return on assets has almost reached 1 per cent and we expect it to grow from here,” said V Vaidyanathan, Managing Director and CEO, IDFC FIRST Bank.
Total profit of the bank for the period from April to June 2022-2023. also rose to Rs 5,777.35 crore against Rs 4,931.76 crore in the corresponding period of 2021-22, IDFC First Bank said in a regulatory filing.
Core interest income rose 20.4 percent to Rs 4,921.68 crore from Rs 4,089.29 crore. Revenue from other sources rose marginally by 1.6% to Rs 855.67 crore from Rs 842.47 crore.
Asset quality, GNPA
The bank’s asset quality showed improvement as gross non-performing assets (NPAs) declined to 3.36 percent of gross advances in the June 2022 quarter from 4.61 percent a year ago.
In absolute terms, gross NPAs (or non-performing loans) declined to Rs 4,354.75 crore from Rs 4,669.13 crore.
Net NPAs also declined to Rs 1,653.82 crore (1.30 per cent) from Rs 2,293.18 crore (2.32 per cent).
This helped the lender narrow its provisioning and contingency requirement to Rs 307.99 crore for the quarter, compared to Rs 1,872.31 crore in the year-ago period.
Core operating profit (excluding trading profit) rose 64 percent to Rs 987 crore in the June 2022 quarter, according to the bank.
Net interest income
Among other things, the bank’s net interest income (interest earned minus interest spent) rose 26 percent to Rs 2,751 crore in Q1FY23. Also, net interest margin improved to 5.89 percent from 5.50 percent.
The lender said its corporate book (excluding infrastructure) rose 12 percent to Rs 23,970 crore, while infrastructure financing fell 35 percent to Rs 6,739 crore.
According to key ratios, capital adequacy as of June 30, 2022 was 15.77 percent, the bank reports. The average liquidity coverage ratio (LCR) was 128 percent.
Vaidyanathan said the bank has built a solid foundation on which it can steadily grow its loan portfolio, deposits and profits.
“In the first quarter of FY23, we have seen a steady growth of more than 20 percent year-on-year, both on the lending side and on the deposit side. Our underlying treasury operating profit grew 64 percent to nearly INR 1,000 crore. crore, which is a key benchmark for us,” he said.
July 30, 2022