IDFC First Bank Q1 results: PAT declines 32% YoY, NII rises by 5.5%

IDFC First Bank has reported a 32% YoY decline in its profit after tax (PAT) at Rs 463 crore in the first quarter of the financial year 2026, while the net interest income (NII) witnessed a growth of 5.1% YoY to Rs 4,933 crore in the same period.

The NII is comparable to Rs 4,695 crore in the first quarter of the last financial year. However, on a quarter-on-quarter basis, the PAT grew 52.1%.

The bank's Net Interest Margin (NIM) on AUM dropped by 24 basis points quarter-on-quarter, falling from 5.95% in Q4 FY25 to 5.71% in Q1 FY26. This decline was mainly due to the impact of repo rate changes, a shift in the asset mix, including a sharp fall in the microfinance segment, and lower investment yields.

Operating profit (excluding trading gains) declined by 6.2% YoY, from Rs 1,858 crore in Q1 FY25 to Rs 1,744 crore in Q1 FY26. However, on a sequential basis, it rose by 7.8%.

The bank reported robust growth in its deposit base for the quarter ended June 30, 2025. Customer deposits rose 25.5% year-on-year to Rs 2,56,799 crore, compared to Rs 2,04,572 crore a year ago.

Retail deposits grew 24.5% to Rs 2,04,222 crore, while CASA deposits surged 30.2% to Rs 1,27,158 crore. The CASA ratio improved to 48% from 46.6% in the same period last year. Retail deposits accounted for 80% of the total customer deposits as of the end of the quarter.

IDFC First Bank reported a stable asset quality profile for the quarter ended June 30, 2025, even as the microfinance sector faced rising delinquencies. The bank is monitoring its microfinance portfolio closely, while provisions for the rest of the book remain steady.

Gross NPA stood at 1.97% as of June 30, 2025, slightly higher than 1.87% in the previous quarter. Net NPA was at 0.55%, compared to 0.53% as of March 31, 2025. Gross NPA of the Retail, Rural, and MSME book rose to 1.82% from 1.70% sequentially.

IDFC First Bank reported a 21% YoY growth in loans and advances, reaching Rs 2,53,233 crore as of June 30, 2025, compared to Rs 2,09,361 crore a year ago. The growth was largely driven by mortgage loans, vehicle loans, business banking, MSME loans, and wholesale loans, which together accounted for 82% of the total incremental loan growth.

The Retail, Rural, and MSME segment grew by 17.4% YoY to Rs 2,03,954 crore. Meanwhile, the wholesale book expanded significantly by 38.6%, rising from Rs 35,564 crore to Rs 49,279 crore.