Key Highlights
- Profit dip: Consolidated net profit fell 8.59% QoQ to ₹1,049.17 crore in Q2 FY27, but rose multi-fold year-on-year.
- Income growth: Net interest income rose 21.04% YoY to ₹6,188 crore.
- Cleaner books: Gross NPA eased to 1.32% and net NPA to 0.40%.
- Deposit surge: Total deposits grew 25.9% YoY to ₹3,48,583 crore, helped by over ₹34,000 crore in FCNR(B) deposits.
- Loan growth: Loans and advances rose 30.1% YoY to ₹3,46,913 crore.
IDFC First Bank on Saturday reported an 8.59 per cent quarter-on-quarter decline in consolidated net profit to ₹1,049.17 crore for Q2 FY27, compared with ₹1,147.82 crore in Q1 FY27. However, on a year-on-year basis, net profit increased multi-fold.
A closer look at the numbers shows that the bank’s core business, asset quality and funding position improved during the quarter.
Q2 FY27 at a Glance
| Metric | Q2 FY27 | Comparison |
|---|---|---|
| Net profit | ₹1,049.17 crore | ₹1,147.82 crore in Q1 FY27 (-8.59%) |
| Net interest income | ₹6,188 crore | +3.59% QoQ, +21.04% YoY |
| Gross NPA | 1.32% | 1.51% in Q1 FY27 |
| Net NPA | 0.40% | 0.44% in Q1 FY27 |
| Provisions | ₹1,137 crore | ₹1,452 crore in Q2 FY26 |
| Total deposits | ₹3,48,583 crore | +25.9% YoY, +11.8% QoQ |
| CASA ratio | 48.4% | 50.1% earlier |
| Loans and advances | ₹3,46,913 crore | +30.1% YoY |
Core Earnings Keep Growing
Net interest income, the difference between what the bank earns on loans and pays on deposits, rose to ₹6,188 crore. That is up 3.59 per cent from ₹5,974 crore in the previous quarter and 21.04 per cent from ₹5,112.81 crore a year ago.
Asset Quality Improves
Gross NPA declined to 1.32 per cent from 1.51 per cent in the previous quarter, while net NPA fell to 0.40 per cent from 0.44 per cent. Provisions also came down to ₹1,137 crore from ₹1,452 crore in Q2 FY26.
Why It Matters: The FCNR(B) Strategy
The quarter’s biggest strategic move was the bank’s mobilisation of Foreign Currency Non-Resident (Bank) deposits, which are foreign-currency deposits from NRIs. MD and CEO V. Vaidyanathan said, “Raising over Rs 34,000 crore FCNR(B) deposits gives us 3-5 year liquidity at 1 per cent lower cost than domestic deposits.”
This explains the slight dip in the CASA ratio to 48.4 per cent from 50.1 per cent, as the large FCNR(B) inflows increased the share of term deposits. For the bank, locking in long-term funding at a lower cost could support margins and lending growth in the coming years.
Costs Under Control
Vaidyanathan also said operating expense growth lagged income growth by 500 basis points for two quarters, with the cost-to-income ratio continuing to fall and return on assets nearing 1 per cent. Improving efficiency has been a key focus area for the bank.
Stock Performance
Shares of IDFC First Bank ended Friday’s session, ahead of the results, at ₹72.35 on the BSE, down 3.47 per cent. The stock has a 52-week high of ₹89.58 and a 52-week low of ₹58.08.
What Comes Next
Investors will watch how the stock reacts to the results when markets reopen, and whether the bank can sustain strong loan growth while keeping asset quality stable and moving its return on assets above 1 per cent.