Private Bank Posts Record Profit in Q4 and FY23, Asset Quality Remains High

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Private Bank Posts Record Profit in Q4 and FY23, Asset Quality Remains High
Credit: © Reuters.

By Malvika Gurung -- The private sector lender IDFC First Bank (NS: IDFB ) posted a record profit for both - the financial year as well as the quarter ended March 31, 2023.

IDFC First Bank reported its highest-ever quarterly profit of Rs 803 crore for the March ended quarter, rallying by a whopping 134% compared to Rs 343 crore in the same quarter last year, driven majorly by strong growth in core operating income.

On a sequential basis, the net profit grew by 32.7%. IDFC First Bank expects profitability to further improve going forward with scale.

For the financial year 2022-23, the bank’s profit after tax skyrocketed 1,580.7% to Rs 2,437 crore from Rs 145 crore in the previous fiscal, reporting the highest-ever yearly profit in FY23.

On the asset quality front, IDFC First Bank’s gross non-performing asset (NPA) improved by 119 basis points to 2.7% in FY23 from 3.7% in FY22, while net NPA improved by 67 bps YoY to 0.86% in the fiscal year.

The bank-level Provision Coverage Ratio (PCR) rose sharply by 1,000 bps to 80.29% in FY23 from 80.29% in the previous year. The retail PCR soared 1,284 bps to 82.43% in the year from 69.59% in FY22.

IDFC First Bank’s net interest income (NII) grew 35% YoY in Q4 FY23 to Rs 3,597 crore from Rs 2,669 crore in the same quarter last year.

“We have built a strong foundation for the bank with diversified customer deposits and a diversified loan book. More importantly, I’m happy to share that the asset quality remains high. If we exclude the infrastructure financing book, which is anyway in run-down mode, the Gross NPA and Net NPA would be 1.84% and 0.46% at the overall bank level,” said the MD & CEO of IDFC First Bank, V Vaidyanathan.

Check out InvestingPro’s detailed breakdown of IDFC First Bank’s March quarterly earnings for better insights.

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