9 Apr 2021

IDFC First Bank

IDFC Bank was founded on 21st October 2014. IDFC Ltd was its ultimate parent, which was established in 1997 by the government for financing infrastructure projects. On 23 July 2015, IDFCB got approval for a banking license. It commenced banking operations on 1st October 2015. IDFCB later merged with Capital First Ltd to form IDFC First Bank in December 2018. As of 31st Dec 2020, its promoter holding stood at 40%.

author dp
Team INRBonds
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IDFC Bank was founded on 21st October 2014. IDFC Ltd was its ultimate parent, which was established in 1997 by the government for financing infrastructure projects. On 23 July 2015, IDFCB got approval for a banking license. It commenced banking operations on 1st October 2015. IDFCB later merged with Capital First Ltd to form IDFC First Bank in December 2018. As of 31st Dec 2020, its promoter holding stood at 40%.

 

Credit Rating-IDFC First Bank has been rated as AA/Stable by both CRISIL & ICRA, AA+/Stable by India Rating

 

Parameters(billion)

FY20

FY19

9MFY20

9MFY21

Net Interest Income

56.00

32.00

41.00

50.00

Net profit

-28.60

-19.40

-29.00

3.00

Total assets

1492.00

1671.80

1600.62

1557.00

Total equity

153.40

181.60

152.40

177.00

Capital adequacy ratio (%)

13.40

15.50

13.28

14.30

GNPA (%)

2.60

2.40

2.83

4.18

NNPA (%)

 

 

1.23

2.04

NIM (%)

3.60

2.40

3.40

4.60

 

 

Financial Performance during 9MFY21

Ø During 9MFY21, NII grew by 22% as compared to that in 9MFY20

Ø GNPA deteriorated to 4.18% as 31st Dec 2020 from 2.6% as of 31st March 2020 driven by Covid pandemic

Ø Net Interest Margin rose to 4.6% during 9MFY21 from 3.4% during 9MFY20

Ø Capital adequacy ratio improved to 14.3% as of 31st Dec 2020 from 13.4% as of 31st March 2020

 

Strong Capitalization-As of 31st Dec 2020, shareholder’s equity rose to Rs 177 billion from Rs 153.4 billion as of 31st March 2020. Bank’s capital adequacy rose to 14.3% as of 31st Dec 2020 from 13.4% as of 31st March 2020.

 

Improvement in profitability- During FY19 & FY20, IDFC First Bank has suffered loss due to higher provisioning for stressed asset and merger. However, during 9MFY21, the bank posted a net profit of Rs 3 billion despite of Covid pandemic.

 

Deterioration in asset quality- As a consequence of economic lockdown due to Covid pandemic, gross NPA of IDFC First Bank rose to 4.18% as 31st Dec 2020 from 2.6% as of 31st March 2020. In the same line, net NPA stood at 2.04% as of 31st Dec 2020.