- 29 Jul 2024
- ICICIdirect Research
IDFC FIRST BANK REPORTED MIXED PERFORMANCE
IDFCFIRSTB - 69 Change: -0.22 (-0.32 %)News: IDFC First Bank reported mixed performance wherein healthy balance sheet growth percolated in operating profit, however, elevated provision impacted earnings. Shift from erstwhile borrowing to deposits seems underway with 22% YoY decline in borrowing and 38% YoY growth in customer deposits (at ₹ 2.04 lakh crore). Advances growth sustained at 22% YoY to ₹ 2.09 lakh crore, driven by 29% YoY growth in retail segment. Margins declined by 13 bps QoQ to 6.22%. Operational performance remained healthy with 25% YoY growth in PPP, backed by 25% YoY growth in NII and 19% YoY growth in fee income, however, higher provision (109% YoY) impacted earnings which de-grew by 11% YoY to ₹ 681 crore. Asset quality seems steady with GNPA/ NNPA increasing 8 bps/ 2 bps QoQ at 1.46%/ 0.46% with collection efficiency normalizing at 99.5% (post a decline in April 2024).
View: Balance sheet restructuring coupled with sustained growth remains positive. However, elevated provisions to remain a concern impacting valuation.
Impact: Neutral