IDFC First Bank reports Q2 loss of Rs 680 cr on one-time tax impact

IDFC First Bank reported a loss of Rs 680 crore due to taking an 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.

"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 constitute 45 per cent 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 levels of 125 per cent as against the mandated 100 per cent, he said.

On asset quality, the gross non-performing assets now form 2.62 per cent 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 an aggregate exposure of Rs 1,231 crore, on which it is carrying a 75 per cent provision.

It also flagged one account in the infra space of Rs 985 crore where it is carrying provisions of only 15 per cent, 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 per cent as compared to the preceding June quarter, helped by a margin expansion to 3.43 per cent.

The cost to income ratio for the bank came down to 75.61 per cent from the 78.60 per cent three months ago.

The bank scrip closed 2.02 per cent to close at Rs 38.85 apiece on the BSE, as against a 0.10 per cent correction on the benchmark.