Good quarter and future growth prospects intact. IDFC First Bank, founded by the merger of erstwhile IDFC Bank and erstwhile Capital First on December 18, 2018. At present, the bank's total number of branches stands at 523, with a total funded assets to the tune of around ~Rs.1,06,828cr. We value the bank at 1.3x Adj BVPS of FY22E and revise our rating...

NII increased 21.8% YoY, 2.1% QoQ to | 1660 crore on account of expansion in NIM, which increased 4 bps QoQ, 114 bps YoY to 4.57%. Other income declined 51.7% YoY. This de-growth can be attributed to 19% drop in fee income due to lower loan origination as a result of low business activity due to pandemic. The bank sold off entire exposure to one of the stressed HFC through secondary market transaction, booked a loss of | 463 crore in trading income and released existing provision of | 460 crore. PAT for the...

IDFC First Bank, founded by the merger of erstwhile IDFC Bank and erstwhile Capital First on December 18, 2018. At present, the bank's total number of branches stands at 503, with a total funded assets to the tune of around ~Rs1,04,050cr. We value the bank at 1.2x Adj BVPS of FY22E and revise our rating...

Quick Research Note

Core business intact, growth and asset portfolio concerns arise IDFC FIRST Bank reported another healthy set of quarterly earnings. NII increased by 38.4% YoY/4.0% QoQ to Rs 1,626 Cr, PPOP increased by 180% YoY/71.5% QoQ to Rs 892 Cr and Net Profit increased to Rs 94 Cr, against Rs 617 Cr loss in Q1FY20. Other income increased on account of treasury gains of the bank. The bank has taken provisions of Rs 764 Cr for...

IDFC First Bank's (IDFCFB) Q1FY21 PAT at Rs 0.9bn was aided by 38% YoY growth in NII, stable non-interest income and lower opex QoQ.

The bank offered Morat 2 to 28% of its customers by value vs. 35% in Morat 1. Around 23% is in retail assets including rural portfolio and 35% is in the wholesale financing portfolio. Provision was at | 764 crore, including | 375 crore related to Covid-19 over and above | 225 crore done in Q4FY21. Asset quality witnessed a strong sequential improvement with GNPA & NNPA ratio improving ~61 bps and ~43 bps to 1.99% and 0.51%, respectively. Gross NPA of the retail loan book was at 0.87% vs. 1.77% as of March 31, 2020 and net NPA percentage of the retail loan book of the bank...

IDFCFB's earnings performance of Rs935mn (PLe: Rs889mn) was broadly in line with expectations but was better on PPOP on back of better NII and treasury gains which helped to make an additional Rs3.75bn of COVID related provisions and now has Rs6bn (60bps of loans) of COVID provisions. Loans under moratorium has come off to 28% as compared to 45% in Q4FY20 (35% excl. Agri) with 23% in retail and 35% in wholesale book. Bank's retail drive continues to move ahead with strong SA growth of 24% QQ and Retail TDs up 10% QoQ replacing bulky deposits, while corporate book has continued...

Net Interest Income (NII) reported a growth of 13% on a YoY basis, and Net Interest Margin (NIM) improved to 4.24% in Q4FY20, compared to 3.86% in the previous quarter. Currently Gross/Net NPA stands at 2.60%/0.94% compared to 2.83%/1.23% in Q3FY20. Provision coverage ratio improved for the quarter to 64.53% compared to 57.34% in Q3FY20. We have lowered our advances growth estimates by 13% each for FY21E and FY22E due to Covid 19 pandemic....

The bank had earlier provided with a watch list comprising stressed exposures. Total exposure to this stressed pool has reduced by | 313 crore QoQ at | 3205 crore with provision cover of ~49%, being maintained. Apart from this, it has provided 50% for telecom exposure worth | 3244 crore. With continued focus on balance sheet restructuring funded asset remained broadly stable at | 107400 crore. Within the same, wholesale book, as targeted, de-grew ~11% QoQ to | 39388 crore (infrastructure exposure declined 5% QoQ, corporate fell 15% QOQ). Retail book continued to grow...

loans. Few upsides in Q4 were (i) strong CASA growth of 27% QoQ moving up the ratio to 31.7%, up 810bps QoQ (ii) 40bps QoQ of NIM improvement to 4.24% led by continued mix change towards retail (grew 40% YoY) plus improvement in cost of funds due to sharp decline in bulk deposits replaced by retail and (iii) asset quality has held up especially in retail. Some niggling issues that will keep ROEs in lackluster are (i)steady asset growth as bank continues to adjust wholesale liabilities & assets, (ii)continued opex/assets on high retail focus and (iii)COVID impact on asset quality. may keep ROEs...

IDFC First Bank's (IDFCFB) Q4FY20 PAT at Rs 715mn was driven by 40% YoY growth in NII.

In an exchange notification, IDFC First Bank has informed exchanges that its board has approved raising of | 2000 crore equity capital by issuing ~86.24 crore shares through preferential route at | 23.19/share. Promoter IDFC Ltd will subscribe to ~34.5 crore shares maintaining its holding at 40%. Other investors include ICICI Prudential Life Insurance (~25.87 crore shares), HDFC Life Insurance (~8.6 crore shares), Bajaj Allianz Life Insurance (~8.6 crore shares) and Dayside Investment, an affiliated entity...

Net Interest Income (NII) has grown by 12.6% on a sequential basis, with Net Interest Margin (NIM) improved to 3.86%, compared to 3.01% in the previous quarter. Currently Gross/Net NPA stands at 2.83%/1.23% compared to 2.62%/1.17% in Q2FY20, while 7x sequential increase in provisions has pulled down the net income for the quarter. The cost to income (C/I) ratio stood at 73.52% in Q3FY20. We expect loans & advances to grow at a CAGR of 18% over FY20E22E and NII to grow at a CAGR of 35% over the same period....

Led by stress within legacy book, GNPA ratio increased 21 bps QoQ to 2.83% though retail GNPA remained stable at ~2.26%. The bank has provided a watchlist of legacy exposure towards various sectors i.e. financial, logistic, infrastructure, energy & telecom encompassing total exposure at ~| 6700 crore (including | 3245 crore to one telecom account). The management through its prudent approach has maintained ~51% PCR on watchlist. It is confident that major part of stress within legacy book has...

New merged entity - to ramp up retail loan assets IDFC First Bank is founded by the merger of erstwhile IDFC Bank and erstwhile Capital First on December 18, 2018. At present, the bank's...

IDFC First Bank has walked a long path of transformation starting from infrastructure finance NBFC to universal bank. To strengthen retail franchise, IDFC Bank & Capital First Ltd engaged into a merger to form IDFC First Bank in December 2018. The merged entity is the eighth largest private bank with funded asset at ~| 112558 crore (retail: wholesale 40:60) as of March 2019 and wide customer base of ~70 lakh. It is being headed by V Vaidyanathan, who has a proven track record at Capital First. IDFC First Bank has a pan...

NII grew to Rs. 489.84 Cr in Q1FY19 compared to Rs. 453.23 Cr in Q4FY18. IDFC Bank Ltd Q1FY19 results Comment

IDFC Bank Ltd Q3FY18 results comment NII grew to Rs. 494.96 Cr in Q3FY18 compared to Rs. 461.88 Cr in Q2FY18

IDFC and Shriram group announced a 90-day exclusivity period to discuss a merger. The plan is to merge IDFC Bank with Shriram City Union Finance (SCUF); whereas Shriram Transport Finance (SHTF) and other Shriram group entities (life insurance, general insurance, AMC) will be separate subsidiaries of..