IDFC First Bank announced Q3FY23 results: Q3FY23: Deposits & Borrowings: Customer Deposits increased by 44% from Rs 85,818 crore as of Q3FY22 to Rs 1,23,578 crore as of Q3FY23. CASA deposits grew by 39% YoY from Rs 47,859 crore as of Q3FY22 to Rs 66,498 crore as of Q3FY23. CASA ratio reduced from 51.6% as of Q3FY22 to 50% as of Q3FY23. Retail deposits constitute 77% of total customer deposits as of Q3FY23. Legacy high-cost borrowings reduced from Rs 26,163 crore as of Q3FY22 to Rs 18,762 crore as of Q3FY23. Funded Assets: Funded assets (including advances & credit substitutes) increased by 25% YoY from Rs 1,21,419 crore as of Q3FY22 to Rs 1,52,152 crore as of Q3FY23. The bank continues to wind down infrastructure financing as per stated strategy. Infrastructure financing reduced by 31% on a YoY basis and now constitutes only 3.7% of total funded assets as of Q3FY23. Exposure to top 20 single borrowers reduced from 11% as of Q3FY22 to 7% as of Q3FY23. Profitability: Net profit for 9MFY23 increased to Rs 1,635 crore from net loss of Rs 197 crore in 9MFY22. Net profit for Q3FY23 grew 115% YoY from Rs 281 crore in Q3FY22 to Rs 605 crore in Q3FY23 driven by strong growth in core operating income. Net Interest Income (NII) grew 27% YoY from Rs 2,580 crore in Q3FY22 to Rs 3,285 crore in Q3FY23. Fee and other income grew by 50% YoY from Rs 744 crore in Q3FY22 to Rs 1,117 crore in Q3FY23. Retail fees constitute 91% of the overall fees for the quarter Q3FY23. While the core operating income (NII plus fees, excluding trading gains) grew 32% from Rs 3,324 crore in Q3FY22 to Rs 4,402 crore in Q3FY23, the operating expense grew slower than income growth at only 23% YoY from Rs 2,579 crore in Q3FY22 to Rs 3,177 crore in Q3FY23, thus resulting in improved operating leverage. Consequently, the core operating profit (excluding trading gains) grew strongly by 64% YoY from Rs 745 crore in Q3FY22 to Rs 1,225 crore for the quarter Q3FY23. Provisions increased 15% YoY from Rs 392 crore in Q3FY22 to Rs 450 crore in Q3FY23. The credit cost (quarterly annualized) as % of average funded assets for Q3FY23 was 1.2%. For 9MFY23, the annualized credit cost was 1.1% against the provided guidance of 1.5% for FY23. The RoA (annualized) improved from 0.64% in Q3FY22 to 1.11% in Q3FY23 The RoE (annualized) improved from 5.44% in Q3FY22 to 10.72% in Q3FY23. Capital Position & Liquidity: Capital Adequacy (including profits for 9MFY23) of the bank was strong at 16.06% with CET-1 Ratio of 13.49% as of Q3FY23. Average LCR was strong at 122% for the quarter ending in Q3FY23. Mr. V Vaidyanathan, Managing Director and CEO, IDFC FIRST Bank, said, “We are happy to state that we have now built a strong foundation for the bank with CASA ratio at 50% and strong retail deposit franchise contributing 77% of the overall customer deposits. The deposit franchise continues to grow strong at the bank based on our customer friendly products & services, excellent customer service, strong brand known for corporate governance, ethics and digital innovations. We are now confident of growing our loan book in a stable manner on this strong platform. We are happy to share that our asset quality continues to remain strong. On the retail side, where our bank particularly specializes in, the gross NPA has come down to 1.87% and the net NPA has come down to 0.70%, against the guidance of GNPA and NNPA of 2% and 1% respectively. Even at the overall bank-level, both the Gross and Net NPA improved to 2.96% and 1.03% respectively from 3.96% and 1.74% last year same time. We are confident that our improvement trend would continue going forward as the issues on legacy wholesale book, especially in infrastructure finance, are addressed and the book continues to run down. We are happy to state that we have registered our highest-ever profit of Rs 605 crore in Q3FY23 and our return on equity has now moved firmly into double digits. We thank all our stakeholders for their confidence and support during the last many years and we believe we are all set to deliver strong financial performance from here on. We continue to focus on building a strong culture of customer friendliness, customer service ethics and high levels of corporate governance in the bank in terms of our customer practices.” Result PDF