IDFC FIRST Bank posted 168% rise in profit YoY, NII grew 32% and NNPA declined 33 bps in its Q4FY22 result

GNPA and NNPA reduced by 45 bps and 33 bps YoY to reach 3.70% and 1.53% respectively. The Commercial loan Book of the Bank increased by 15% YoY to Rs. 11,637 crore as on March 31, 2022 from Rs. 10,104 crore as on March 31, 2021. This book constitutes 9% of funded assets as on March 31, 2022

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IDFC FIRST Bank provides customized financial solutions to corporates individuals small and micro enterprises (SMEs) entrepreneurs financial institutions and the government. The Bank is a subsidiary of IDFC Ltd. As on March 31 2021 the Bank has built a national footprint through the operation of 596 branches 592 ATMs and 85 recyclers across the country. IDFC was granted an in-principle approval by Reserve Bank of India (RBI) on 9 April 2014 to set up a new bank in the private sector under Section 22 of the Banking Regulation Act 1949.

Accordingly a new company namely IDFC Bank (?) with a paid up capital of ₹5 lakh was incorporated on 21 October 2014 at Chennai Tamil Nadu under the Companies Act 2013 to carry out the business of banking. As per the terms and conditions contained in the in-principle approval and the RBI New Banking Guidelines IDFC was required to transfer Financing Undertaking to IDFC Bank.

The Board of Directors of IDFC at its meeting held on 30 October 2014 approved a proposal to demerge its Financing Undertaking into its wholly owned step down subsidiary – IDFC Bank under a Demerger Scheme, now the bank has posted its Q4FY22 and year ended financial results today, the details are as below :

(I) Audited Consolidated Financial Results for Quarter Ended (YoY comparison):

The company has reported, a consolidated Total Income of ₹5,384.88 crore in the quarter ended on March 31, 2022 as against ₹4,811.18 crore in the corresponding quarter ended last year on Mar 31, 2021, increased by 11.92%.

The company has posted a consolidated Net Profit of ₹342.73 crore in the quarter ended on March 31, 2022 as against ₹127.81 crore in the corresponding quarter ended in last year on Mar 31, 2021. The PAT surges up by 168.51%.

The status of the EPS of the company stood at ₹0.54 as on March 31, 2022 compared to the previous quarter ended on Mar 31, 2021 which was ₹0.22, up by 145.45%.

₹*Mar 31, 2022 (Q4FY22)Dec 31, 21 (Q3FY22)Mar 31, 21 (Q4)
Total Income5,384.885197.794,811.18
Total Expenses4558.364428.064188.17
PBT /(Loss)457.05377.8843.11
Total Tax /(credit)114.3296.82(84.70)
PAT /(Loss) [to the owners]342.73281.06127.81
*figures are in Crores

(II) Audited Consolidated Financial Result details for the Year Ended :

The company has reported, a consolidated Total Income of ₹20,394.72 crore in the financial year ended on March 31, 2022 as against ₹18,179.19 crore for the financial year ended on Mar 31, 2021, increased by 12.18%.

The company has posted a consolidated Net Profit of ₹145.49 crore in the financial year ended on March 31, 2022 as against ₹452.28 crore for the financial year ended on March 31, 2021. The PAT surges down by 67.83%.

The status of the EPS of the company stood at ₹0.23 as on March 31, 2022 compared to the previous year ended on March 31, 2021 which was ₹0.81, down by 71.6%.

₹*Mar 31, 2022 (FY22)Mar 31, 2021 (FY21)
Total Income20,394.7218,179.19
Total Expenses17110.9715680.88
PBT /(Loss)175.17457.78
Total Tax /(credit)29.6823.50
PAT /(Loss)145.49452.28
*figures are in Crores

(III) Key Highlights about the Performance :

Net Interest Income (NII):

NII grew by 36% YoY to Rs. 2,669 crore in Q4 FY22, up from Rs. 1,960 crore in Q4 FY21. The NII for FY22 grew by 32% YoY to Rs. 9,706 crore, up from Rs.7,380 crore in FY21.

Net Interest Margin (NIM%):

NIM (quarterly annualized) of the Bank improved to 6.27% for Q4-FY22 from 5.17% in Q4-FY21. NIM for FY22 stood improved to 5.96% as compared to 5.03% in FY21.

  • Fee and Other Income increased strongly by 40% YoY to Rs. 841 crore in Q4 FY22 from Rs.600 crore in Q4 FY21. The increase was 13% on a sequential basis. During FY22, the Fee and Other Income grew by 66% YoY to Rs. 2,691 crore from Rs. 1,622 crore in FY21.
  • Core operating income (NII + fee and other income excluding trading gains) increased by37% YoY to Rs. 3,510 crore in Q4-FY22 from Rs. 2,561 crore in Q4-FY21 aided by strong NII and Fee income growth. During FY22, the Core operating income grew by 38% YoY to Rs.12,397 crore from Rs. 9,002 crore for FY21.
  • Fee Income growth was contributed primarily by the fees related to loan sourcing higher transaction led fees, distribution and wealth management fees etc. Retail fees constitutes 84% of the overall fees for the quarter.
  • Operating Expense grew 24% YoY at Rs. 2,674 crore for Q4-FY22 as compared to Rs. 2,156 crore for Q4-FY21 on account of increased business. For FY22, the operating expenses are up by 36% at Rs. 9,644 crore as compared to Rs. 7,093 crore in FY21.
  • Core Operating Profit (excluding trading gains) grew by 106% YoY basis to Rs. 836 crore for the quarter Q4-FY22 from Rs. 405 crore in Q4-FY21. During FY22, the Core operating profit grew by 44% YoY basis to Rs. 2,753 crore from Rs. 1,909 crore in FY21.
  • Provisions were lower by 36% and 6% on a YoY and QoQ basis respectively at Rs. 369 crore in Q4-FY22 as compared to Rs. 580 crore in Q4-FY21 and Rs. 392 crore in Q3 FY22.

Funded Assets :
Gross funded assets increased by 13% from Rs. 1,17,127 crore as on March 31, 2021 to Rs. 1,31,951 crore as on March 31, 2022

Retail Funded Assets:

  • Retail funded book is highly diversified over multiple lines of businesses. The Retail funded book increased 28% YoY to Rs. 83,740 crore as on March 31, 2022 from Rs. 65,300 crore as on March 31, 2021
  • Housing loans book grew by 52% YoY as of March 31, 2022. Mortgage backed businesses grew 25% YoY as of March 31, 2022.
  • Retail funded asset book constitutes 63% of overall funded asset book at March 31, 2022.
  • Bank has over 7 lakh Credit Cards in force as on March 31, 2022 with portfolio outstanding of Rs. 2,013 crore. As of March 31, 2022, most of its customers have been acquired by cross-selling to existing customers.

Commercial loans:

  • The Commercial loan Book of the Bank increased by 15% YoY to Rs. 11,637 crore as on March 31, 2022 from Rs. 10,104 crore as on March 31, 2021.
  • This book constitutes 9% of funded assets as on March 31, 2022. The bank has significant presence in the Retail lending market of the country and are confident of maintaining growth momentum going forward, ~25% YoY growth from hereon for the foreseeable future
  • Corporate (non-Infra) funded book increased by 5% YoY to Rs. 23,676 crore as on March 31, 2022 from Rs. 22,499 crore as on March 31, 2021. However, it increased by 9% on a sequential basis.
  • Infrastructure book reduced by 36% on a YoY basis to Rs. 6,891 crore and now constitutes only 5.2% of total funded assets as on March 31, 2022 as compared to 9.2% as on March 31, 2021. The Bank will continue to run down this legacy infrastructure financing book.
  • Other Corporate Funded Assets (Security Receipts, Loans converted into Equity, PTC and RIDF) decreased by 29% YoY to Rs. 6,007 crore as on March 31, 2022 from Rs. 8,416 crore as on March 31, 2021
  • Top 10 Borrowers concentration as % of total Funded Assets has reduced to 3.7% as on March 31, 2022 from 5.9% as on March 31, 2021.

(IV) Asset Quality and CAR :

Asset quality at Bank Level, GNPA and NNPA reduced by 45 bps and 33 bps YoY to reach 3.70% and 1.53% respectively. On the overall Bank level, but for this one infrastructure account, which we hope to recover in due course without any economic loss, the GNPA and NNPA of the Bank would have been 3.04% and 1.02% respectively as on March 31, 2022 and the PCR of the Bank would have been 77% including technical write-off.

Q4FY22Q3FY22Q4FY21
Gross NPA ₹*4,469.134,456.944,303.01
Gross NPA %3.73.964.15
Net NPA ₹*1,808.071,914.001,883.28
Net NPA %1.531.741.86
RoA %0.760.640.33
CAR** %16.7415.3813.77
*₹ are in Crores **Capital Adequacy Ratio

The stock of IDFC FIRST Bank last hit in BSE,

  • Intraday High of ₹ 40.55
  • Intraday low of ₹ 39.30