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    IDFC First Bank reports net profit of Rs 342.7 crore on lower provisions, misses estimates

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    IDFC First Bank reports net profit of Rs 342.7 crore on lower provisions, misses estimates

    Private lender IDFC First Bank on Saturday reported a 168 percent year-on-year (YoY) jump in net profit at Rs 342.7 crore for the fourth quarter ended March 31, 2022, driven by strong growth in core operating income and lower provisioning.
    In the corresponding quarter last year, the company posted a net profit of Rs 127.8 crore. CNBC-TV18 Polls had predicted a profit of Rs 388 crore for the quarter under review.
    The net profit for FY22 de-grew by 68 percent YoY basis to Rs 145 crore as compared to Rs 452 crore in FY21, due to higher provisioning in Q1-FY22 to manage the COVID-19 second wave impact on its assets.
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    Net interest income (NII) grew by 36 percent YoY to Rs 2,669 crore in Q4 FY22, up from Rs 1,960 crore in Q4 FY21. The NII for FY22 grew by 32 percent YoY to Rs 9,706 crore, up from Rs 7,380 crore in FY21.
    Net interest margin (NIM) of the bank (quarterly annualized) improved to 6.27 percent for Q4-FY22 from 5.17 percent in Q4-FY21. NIM for FY22 stood improved to 5.96 percent as compared to 5.03 percent in FY21.
    The capital adequacy of the bank was strong at 16.74 percent with a CET-1 Ratio of 14.88 percent as of March 31, 2022, against the regulatory requirement for the Capital Adequacy Ratio of 11.5 percent with a Tier-I Ratio of 9.5 percent. The Capital Adequacy Ratio improved from 13.77 percent with CET-1 Ratio at 13.27 percent as of March 31, 2021.
    Fee and other income increased strongly by 40 percent YoY to Rs 841 crore in Q4 FY22 from Rs 600 crore in Q4 FY21. The increase was 13 percent on a sequential basis. During FY22, the fee and other income grew by 66 percent YoY to Rs 2,691 crore from Rs 1,622 crore in FY21.
    Core operating income (NII + fee and other income excluding trading gains) increased by 37 percent YoY to Rs 3,510 crore in Q4-FY22 from Rs 2,561 crore in Q4-FY21 aided by strong NII and fee income growth.
    During FY22, the core operating income grew by 38 percent YoY to Rs 12,397 crore from Rs 9,002 crore for FY21. Fee income growth was contributed primarily by the fees related to loan sourcing, higher transaction led fees, distribution and wealth management fees etc. Retail fees constitute 84 percent of the overall fees for the quarter.
    Operating expense grew 24 percent YoY at Rs 2,674 crore for Q4-FY22 as compared to Rs 2,156 crore for Q4-FY21 on account of increased business. For FY22, the operating expenses are up by 36 percent at Rs 9,644 crore as compared to Rs 7,093 crore in FY21.
    Core operating profit (excluding trading gains) grew by 106 percent YoY basis to Rs 836 crore for the quarter Q4-FY22 from Rs 405 crore in Q4-FY21. During FY22, the core operating profit grew by 44 YoY basis to Rs 2,753 crore from Rs 1,909 crore in FY21.
    Provisions were lower by 36 percent and 6 percent on a YoY and QoQ basis respectively at Rs 369 crore in Q4-FY22 as compared to Rs 580 crore in Q4-FY21 and Rs 392 crore in Q3 FY22. The bank has not utilised the Covid provision during the quarter and carries Covid provisions of Rs 165 crore as of March 31, 2022.
    The bank is broadly on track to meet the asset quality and credit cost guidance. Based on the improved portfolio performance indicators, the bank is confident to achieve its credit cost guidance for FY23 at 1.5 percent on funded assets.
    CASA Deposits posted growth of 11% YoY to reach Rs 51,170 crore as of March 31, 2022, as compared to Rs 45,896 crore as of March 31, 2021. Current Account Deposits now contribute to 18.29 percent of total CASA as compared to 11.80 percent as of March 31, 2021.
    CASA Ratio was at 48.44 percent as of March 31, 2022, as compared to 51.75 percent as of March 31, 2021. The average CASA Ratio for FY22 improved to 49.88 percent as compared to 41.50 percent for FY21.
    Customer Deposits increased by 13 percent to Rs 93,214 crore as of March 31, 2022, as compared to Rs 82,725 crore as of March 31, 2021. As of March 31, 2022, the bank has 641 branches and 719 ATMs (including recyclers) across the country.
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