IDFC First Bank rallies 11% in two days on strong retail loan growth in Q3

Shares of IDFC First Bank moved higher by 7 per cent to Rs 44.20 on the BSE on Thursday, gaining 11 per cent in the past two trading days, after the bank reported strong retail loan growth during October-December quarter (Q3FY21). The stock of the private sector lender was trading close to its 52-week high level of Rs 45.50 touched on January 15, 2020.

While overall funded assets of the bank increased 0.7 per cent year on year (YoY) to Rs 1.10 trillion in Q3FY21, retail assets grew 24 per cent YoY (11 per cent quarter on quarter(QoQ)) to Rs 66,635 crore. Retail Funded Assets, including the PSL Buyouts, thus constitute 64 per cent of overall Funded Assets, IDFC First Bank said in Q3 update.

Motilal Oswal Financial Services believe the strong traction in retail loans was aided by festive demand and an improved economic outlook.

"IDFC First Bank continues to show strong momentum in deposits. Customer deposits grew 41 per cent YoY (11 per cent QoQ) to Rs 77,289 crore, within which retail deposits (CASA + Term Deposits) grew 100 per cent YoY (18 per cent QoQ) to Rs 58,435 crore," it said.

Thus, the average CASA ratio for Q3FY21 stood at 44.6 per cent as against 36.5 per cent in Q2FY21. The CASA ratio on outstanding deposits stood at 48.4 per cent.

The brokerage firm believes that IDFC First Bank is progressing well in its endeavor to become a retail lender and showing strong traction in growing its retail franchise in terms of both loans and deposits.

At 11:55 am, the stock was trading 6 per cent higher at Rs 43.85 on the BSE, as compared to a 0.21 per cent gain in the S&P BSE Sensex. A combined 75 million equity shares had changed hands on the counter on the NSE and BSE till the time of writing of this report.