IDFC First Bank on Saturday reported that its net profit for the March 2022 quarter more than tripled to Rs 343 crore, on the back of strong core operating income and lower bad debt provisions.
The private sector lender reported a net profit of Rs 1.28 crore in the same quarter of the previous fiscal.
IDFC First Bank said in a regulatory filing that total revenue for the January-March quarter of 2021-22 rose to Rs 5,384.88 crore from Rs 4,811.18 crore in the same period in FY21.
“Net profit in Q4-FY22 rose 168% to Rs 3.43 crore from Rs 1.28 crore in Q4-FY21, driven by strong growth in core operating income and lower provisions,” the bank said.
Net interest income (NII) for the quarter rose 36% to Rs 2,669 crore, while fees and other income rose 40% to Rs 841 crore.
Provisions excluding taxes fell by 36% to Rs 3.69 crore in the March 2022 quarter, reducing gross asset quality and net asset quality by 45 and 33 basis points to 3.40% and 1.53%, respectively, the lender said.
“Our core operating profit more than doubled (up 106%) to Rs 836 crore in Q4 FY22 compared to Rs 405 crore in Q4 FY21. This shows that we are building Power of business model.Our PAT grew 168 YOY from Rs 128 crore to Rs 343 crore, said V Vaidyanathan, Managing Director and Chief Executive Officer of IDFC FIRST Bank.
However, net profit in 2021-22 fell 68% to 1.45 crore from Rs 4.52 crore in 2020-21 due to higher provisioning in 1QFY22 to manage the impact of the second wave of COVID-19 on its assets IDFC Rupee First Bank said.
Total revenue for the year increased from Rs 18,179.19 crore to Rs 20,394.72 crore.
NII in FY22 rose 32% to Rs 9,706 crore from Rs 7,380 crore in FY21. Fees and other income rose 66% to Rs 2,691 crore from Rs 1,622 crore.
The lender said it did not use Covid provisions for the quarter ended March 31, 2022 and held Covid provisions of Rs 1.65 crore.
“The bank is broadly on track to meet asset quality and credit cost guidance. Based on improved portfolio performance metrics, the bank is confident it will achieve its FY23 credit cost guidance of nearly 1.5% on financing assets,” it said.
The bank said it saw the impact of the second Covid wave waning, and the improvement was reflected in improved asset quality.
An infrastructure loan (Mumbai Toll Road Account) which became an NPA in 1QFY22 continued to pay part of its dues, the lender said outstanding principal decreased by Rs 250 crore in the quarter to 7.94 crore as at 31 March 2022 rupee. .
Cash flow from this account is likely to normalize gradually as traffic on Mumbai highways returns to normal.
“While the account is currently an NPA, we expect to collect our dues and do not expect the eventual loss of the account to be material in due course,” it noted.
“At the bank-wide level, if it weren’t for this infrastructure account that we hope to recover in time without any financial loss, the bank’s GNPA (gross non-performing assets) and NNPA (net NPA) would be 3.04% as of March 2022 On the 31st, at 1% and 1.02% respectively, the bank’s PCR (Provision Coverage Ratio) was 77% including technical write-offs,” the bank added.
Of this, the bank’s CASA (Current Account Savings Account) deposits rose 11% to Rs 511.7 crore as at March 31, 2022, compared to Rs 458.96 crore a year earlier.
It said that current account deposits now account for 18.29% of the total CASA, compared with 11.80% at the end of March 2021.
Vaidyanathan said the retail business was one of the main drivers of growth, with NPA continuing to decrease over the past four quarters.
“Our retail gross NPA dropped sharply from 4.01% in FY21 to 2.63% in FY22, and our net NPA dropped from 1.90% to 1.15%. Based on internal analysis, we are comfortably reducing our retail GNPA and NNPA to 1.15%, respectively, as previously guided. 2% and less than 1%,” he added.