IDFC First Bank Q2 loss at Rs 680 cr on one-time tax impact; shares jump 8% after lender posts PBT of Rs 100 cr in September quarter
IDFC Bank reduced its loan book by over Rs 5,000 crore to focus only on retail loans during the quarter, which now constitutes 45% of the book.
The bank's profit before tax came at Rs 100 crore, as against a loss of Rs 583 crore in the year-ago period
On asset quality, the gross non-performing assets now form 2.62% of the loans, while the provisions for bad loans went up to Rs 1,294 crore from Rs 1,203 crore in June
The core net interest income stood at Rs 1,363 crore, which was up 11% as compared to the preceding June quarter
Mumbai: IDFC First Bank reported a loss of Rs 680 crore due to taking a one-time impact on deferred tax asset markdown as against Rs 617 crore in the quarter ago period.
The profit before tax came at Rs 100 crore, as against a loss of Rs 583 crore in the year-ago period.
Meanwhile, the shares of IDFC First Bank on Friday jumped 8 percent to Rs 41.95 after the lender posted profit before tax of Rs 100 crore for the September quarter as compared to a loss of Rs 583 crore in the corresponding period last year, said a report in Mint.
"The key aspects this quarter are maiden profitability and strong growth in retail deposits and CASA addition of Rs 6,000 crore," its managing director and chief executive V Vaidyanathan said.
The bank, which has been formed with the merger of infra-focused IDFC Bank and the non-bank lender Capital First in January 2019, reduced its loan book by over Rs 5,000 crore to focus only on retail loans during the quarter, which now constitutes 45 percent of the book.
While the overall loan book has gone down, it is a more profitable growth as the retail loans are more profitable and has grown by Rs 3,400 crore last quarter, Vaidyanathan said.
As the bank has not been able to deploy the money, it has kept the liquidity coverage ratio at an elevated level of 125 percent as against the mandated 100 percent, he said.
On asset quality, the gross non-performing assets now form 2.62 percent of the loans, while the provisions for bad loans went up to Rs 1,294 crore from Rs 1,203 crore in June.
From a stress perspective, the bank said it has two identified accounts to a non-bank lender and a housing finance company with aggregate exposure of Rs 1,231 crore, on which it is carrying a 75 percent provision.
It also flagged one account in the infra space of Rs 985 crore where it is carrying provisions of only 15 percent, wherein the cashflows are strong but repayments are behind schedule.
The core net interest income stood at Rs 1,363 crore, which was up 11 percent as compared to the preceding June quarter, helped by a margin expansion to 3.43 percent.
The cost to income ratio for the bank came down to 75.61 percent from 78.60 percent three months ago.
The bank scrip closed 2.02 percent to close at Rs 38.85 apiece on the BSE, as against a 0.10 percent correction on the benchmark.
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