IDFC First Bank spurts after posting PBT of Rs 100 cr in Q2 quarter

IDFC First Bank rose 4.5% to Rs 40.60 after the bank reported a net loss of Rs 680 crore in Q2 September 2019 due to one-time impact on deferred tax asset markdown.

The profit before tax (PBT) came at Rs 100 crore in Q2 September 2019, compared with a loss of Rs 583 crore in Q2 September 2018 and loss of Rs 963 crore in Q1 June 2019. The bank decided to mark down deferred tax assets (DTA) as a result of reduction in corporate tax rates from 35% to 25%. The DTA markdown resulted in net loss (after tax) of Rs 680 crore for the quarter, as a consequence of one-time tax impact of Rs 751 crore due to markdown of existing deferred tax assets.

Current account and savings account (CASA) deposits posted strong growth rising 99% YoY and 30% sequentially to Rs 12,473 crore as of 30 September 2019.

The bank's gross non-performing assets (NPAs) stood at Rs 2306.26 crore as on 30 September 2019 as against Rs 2418.56 crore as on 30 June 2019 and Rs 895.50 crore as on 30 September 2018.

The gross NPA of the bank was stable at 2.62% in Q2 September 2019 as compared to 2.66% as of Q1 June 2019. The net NPA of the bank was stable at 1.17% as compared to 1.35% as of 30 June 2019.

The bank's provisions and contingencies fell 47.23% to Rs 317.35 crore in Q2 September 2019 over Q2 September 2018.

The bank's capital adequacy ratio (CAR) was at 14.65% as on 30 September 2019 as compared to 19.18% in Q2 September 2018.

Net interest income for the reported quarter was at Rs 1,363 crore, up 202% Y-o-Y from Rs 451 crore (pre-merger), and up 16% QoQ (Rs 1,174 crore). Net interest margin grew to 3.43% for the quarter, from 1.56% pre-merger, in a span of just nine months since merger.

Commenting on bank's performance, V Vaidyanathan, Managing Director and CEO, IDFC FIRST Bank, said, "the Bank is making excellent progress on all parameters. CASA growth is 99% year on year. Including retail deposits and retail casa, the bank raised nearly Rs 6000 crores during Q2FY20, giving us a strong liquidity surplus. Our liquidity coverage ratio was 125%, much higher than regulatory requirements of 100%."

On the BSE, 24.01 lakh shares were traded in the counter so far compared with average daily volumes of 8.88 lakh shares in the past two weeks. The stock hit a high of Rs 41.95 and a low of Rs 39.75 so far during the day.

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