IDFC First Bank is set to announce its second-quarter earnings today, with expectations of strong growth in net interest income (NII), though profit is likely to dip.
According to Centrum Broking, IDFC First Bank’s profit after tax (PAT) may drop to ₹606 crore, largely due to increased credit costs. The brokerage expects a 25% year-on-year rise in NII, driven by growth in loans and a shift towards more retail deposits. Net interest margins (NIM) are expected to remain stable at 6.6%, while pre-provision operating profit (PPoP) could grow by 29% year-on-year due to lower operating costs.
Motilal Oswal forecasts a 22% year-on-year growth in NII, but also anticipates a 24% decline in profit. They highlight steady business growth, with a slight rise in the bank’s gross non-performing assets (GNPA) ratio and elevated cost ratios. Focus areas include strong deposit growth and stable margins.
In a recent update, IDFC First Bank reported a 21.3% year-on-year increase in loans to ₹2.22 lakh crore and a 32% jump in customer deposits to ₹2.17 lakh crore, which outpaced loan growth as the bank plans to repay legacy borrowings. CASA (Current Account and Savings Account) deposits rose 38% year-on-year, with the CASA ratio at 48.9% as of September 2024, up from 46.4% a year ago.
IDFC First Bank recently completed its merger with IDFC Ltd, enhancing its overall financial position.
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