IDFC First Bank reported a 4.9% year-on-year increase in net profit for the fourth quarter of FY26. This was supported by strong growth in net interest income and a sharp reduction in provisions, even as operating profit declined amid pressure on other income, as per an exchange filing on Saturday. Net profit for the quarter stood at Rs 319 crore, compared with Rs 304 crore in the year-ago period. Earnings were aided by a tax refund of Rs 130 crore during the quarter, versus a tax expense of Rs 57 crore in Q4FY25.
Net interest income (NII) grew 15.7% year on year to Rs 5,677 crore, up from Rs 4,907 crore, reflecting healthy loan growth and stable performance across the bank's core lending franchises. The bank said 87% of the year-on-year growth in loans was driven by mortgages, vehicle loans, consumer loans, business banking and wholesale banking, underscoring a diversified expansion strategy.
Asset quality improved sequentially, with the gross non-performing asset (GNPA) ratio easing to 1.61% from 1.69% in the previous quarter. Net NPAs declined to 0.48% from 0.53% QoQ. Management said asset quality across most businesses remains stable, adding that stress in the microfinance segment—an industry-wide issue in FY25 and FY26—has largely played out.
Provisioning costs fell sharply to Rs 869 crore in Q4FY26, compared with Rs 1,450 crore a year ago and Rs 1,398 crore in the December quarter. The decline was partly due to the sale of equity shares in a stressed power company. Provisions as a percentage of average loans declined steadily through FY26, reaching a two‑year low of 1.63% in Q4, while provisions as a share of average total assets fell to 1.18%.
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Operating profit, however, declined 41.6% year on year to Rs 1,059 crore. The drop was largely on account of weaker other income, as the bank reported a loss of Rs 274 crore from the sale of a stressed power asset during the quarter.
Separately, the bank addressed the incident in Chandigarh, stating that it has fully expensed the impacted amount in Q4FY26. The post‑tax impact of the incident stands at Rs 483 crore. Management said it is reasonably certain that no further material financial adjustments are required beyond those already recognised.
On business metrics, credit cards in force crossed the 4.5 million mark during the quarter, while the private wealth management business grew 23% year on year to over Rs 57,000 crore.
Commenting on the results, Managing Director and CEO V Vaidyanathan said asset quality remains stable and deposit mobilisation has begun strongly in the first month of Q1FY27. The bank remains confident of sustaining healthy deposit growth in line with past trends.
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