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Prabhudas Lilladher Report
IDFC First Bank Ltd. reported a loss of Rs 6.3 billion (our estimate: profit after tax of Rs 1.2 billion) on back of a much sharper provision Rs 18.8 billion, rise of three times QoQ.
Operating performance was relatively decent on:
savings account rate cut in May 2021 and improving retail mix has helped on strong net interest income
relatively better opex and
treasury leading to pre provision operating profit growth of 12% YoY/55% QoQ.
Slippages of Rs 28.8 billion (annualised 11.5% of loans) were substantially higher, although write off Rs 14.0 billion of loans mainly in retail, prevented sharp deterioration in asset quality.
IDFC First Bank's slippages and provisions should subside as things improve on ground.
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