IDFC First Bank reported 8.37% lower revenues for the quarter ended Sep-20 at Rs4,081.34cr. Operating profit reported on a consolidated basis showed fall of 16.39% at Rs352cr on sharply higher operating costs in the quarter, including employee costs.
Net profits turned around sharply from a loss of Rs676cr in the Sep-19 quarter to a profit of Rs109cr in the Sep-20 quarter. However, this huge turnaround was largely due to tax hit of Rs780cr that IDFC First Bank had to take on its books in the Sep-19 quarter to account for change in the methodology of taxing profits. That created the distortion.
Due to the fall in the operating profits on a yoy basis, the operating profit margins dipped by 83 bps to 8.64% in the Sep-20 quarter. Of course, the net profit margins or NPMs turned around to a positive 2.67% in the Sep-20 quarter.
Here are the financial highlights
|
|
IDFC First Bank |
|
|
|
|
Rs in Crore |
Sep-20 |
Sep-19 |
YOY |
Jun-20 |
QOQ |
|
Total Income |
4,081.34 |
4,454.26 |
-8.37% |
4,413.20 |
-7.52% |
|
Operating Profit |
352.62 |
421.76 |
-16.39% |
900.51 |
-60.84% |
|
Net Profit |
109.03 |
-676.52 |
Not Relevant |
100.08 |
8.94% |
|
|
|
|
|
|
|
|
Diluted EPS |
0.19 |
-1.37 |
|
0.20 |
|
|
Operating Margins |
8.64% |
9.47% |
|
20.40% |
|
|
Net Margins |
2.67% |
-15.19% |
|
2.27% |
|
|
Gross NPA Ratio |
1.62% |
2.62% |
|
1.99% |
|
|
Net NPA Ratio |
0.43% |
1.17% |
|
0.51% |
|
|
Return on Assets |
0.26% |
-1.63% |
|
0.24% |
|
|
Capital Adequacy |
14.73% |
14.65% |
|
15.03% |
|
Key takeaways from the Sep-20 quarter results
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There has been a sharp reduction in the gross NPAs to 1.62% in the quarter. The provisioning has also been aggressive resulting in net NPAs falling to 0.43% indicating substantial potential losses already provided for. How ROA at 0.26% stays below the private banking average and capital adequacy of 14.73% may not support asset building.
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The net interest income or NII for the quarter was 22% higher at Rs1,060cr. In addition, the net interest margins or NIMs has moved up sharply in the Sep-20 quarter to 4.57% from just 3.43% last year.
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Overall customer deposits during the quarter was up by 35% yoy at Rs69,368cr. Of these nearly 40.37% of the deposits were accounted for by CASA deposits, which are traditionally stable yet low cost deposits.
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