IDFC FIRST Bank: Core Pre-provisioning Operating Profit highest ever at Rs. 601 Crore
IDFC FIRST Bank takes prudent provisions for COVID second wave. Expects provisions to taper off for FY 22.
· Total Income grew by 36% YoY basis to reach Rs. 3,034 crore in Q1 FY22.
· Core PPOP (excluding Treasury Gains) grew by 8% YOY to reach Rs. 601 crore.
· Net Loss ofRs. 630 crore for Q1-FY22 because of prudent provisions for COVID wave 2.0.
· Covid provision poolincreased from Rs. 375 crore to Rs. 725 crore during the current quarteron a prudent basisto act as a cushion for Covid impact.
· NII: Strong growth by 25% on a YoY basis to reach Rs. 2,185 crore in Q1-FY22.
· NIM%: Highest ever at 5.51% in Q1-FY22 as compared to 4.86% in Q1-FY21.
· CASA ratio: 50.86%% as of June 30, 2021, as compared to 33.74% as of June 30, 2020.
· CASA balance: Grew by 98% YoY basis to reach Rs. 46,439 crore, despite 200 bps reduction in the peak savings rate in the last 6 months.
· Customer Deposits: Rs. 84,893 crore (grew by 36% YoY).
· Funded Assets: Rs. 1,13,794 crore (grew by 9% YoY).
· Retail Loan Assets: Rs. 72,766 crore (grew by 27% YoY excluding ECLGS portfolio).
· Asset quality: GNPA and NNPA at 4.61% and 2.32% respectively (Reported PCR at 50.86%). Including COVID provisions of Rs. 725 crore, the PCR would be 66.40% at June 30, 2021.
o GNPA and NNPA include impact of 84 bps and 71 bps respectively on account of one Mumbai based infra toll account which slipped during the quarter. The Bank expects no material economic loss in this account eventually as this is an operating toll road and is only delayed. This was already part of the identified stressed asset list disclosed in the previous periods. Excluding this account, the PCR (including COVID provisions) would be 77.23%.
· Capital Adequacy Ratio: Strong at 15.56% with CET-1 Ratio at 14.86%
· Average Liquidity Coverage Ratio (LCR): Average LCR at 166% for Q1-FY22.
Mr. V Vaidyanathan, Managing Director and CEO, IDFC FIRST Bank, said, “Within just two years we have made tremendous progress at the bank. Our CASA ratio is high at 50.86% despite reducing savings account interest rates by 200 bps recently, which points to the trust customers have in our Bank and service levels. Because of our low cost CASA, we can now participate in prime home loans business, which is a large business opportunity.”
“Regarding the loss during the quarter, we have made prudent provisions for COVID second wave, and expect provisions to reduce for the rest of the three quarters in the FY 22. We guide for achieving pre- COVID level Gross and Net NPA, with targeted credit loss of only 2% on our retail book by Q4 FY 22 and onwards, assuming no further lockdowns.”
“Our Core Operating Profits even without treasury operations have reached the highest ever level at Rs. 601 crore. Thus from now on, with reduced expected provisions, the Bank will be well on its path of creating a wonderful profitable franchise.”