IDFC FIRST Bank Q4 Results: Profit Halves As Stress In MFI Book Bites

IDFC FIRST Bank Ltd.'s January-March standalone net profit more than halved on a yearly basis to Rs 304 crore, led by a sharp rise in provisions especially made for the microfinance institutions segment.

This rise in provisions has come as the MFI segment has been witnessing stress, leading to a slowdown in loan disbursals.

Provisions and contingencies for the third quarter were up by twofold to Rs 1,450.47 crore from the year-ago period because of higher slippages in the MFI loan book.

On a sequential basis as well, provisions rose by 8% weighing on the bank's bottomline, down 10%.

While net interest income of the bank rose by 10% on the year to Rs 4,907 crore, net interest margin fell by 9 basis points from 6.04% a quarter ago.

Asset quality of the bank also showed mixed trends with gross non-performing assets ratio falling to 1.87% in the March quarter from 1.97% a quarter ago, but net NPA rising by 1 bps to 0.53% in the December quarter.

Gross slippages for the bank were Rs 2,175 crore, lower than Rs 2,192 crore a quarter ago. But the microfinance business' slippages rose to Rs 572 crore from Rs 437 crore a quarter ago.

Without the microfinance business, the gross slippages for the rest of the loan book improved to Rs 1,603 crore from Rs 1,755 crore a quarter ago.

The bank's advances rose over 20% on the year to Rs 2 lakh crore. Retail, rural and micro, small and medium enterprises book of the bank grew nearly 19% on the year. However, MFI portfolio reduced by 28% on year. At the end of March quarter, the proportion to overall loan book was 4.0%.

The bank’s legacy infrastructure book reduced by 17% on year.

Customer deposits rose by 25% on the year to Rs 1.93 lakh crore. The Current Account Savings Account ratio of the bank was 46.9% as of the end of March, as against 47.2% a year ago.