IDFC First Bank rose 2.87% to Rs 28.65 after net profit of Rs 93.55 crore in Q1 June 2020 compared with net loss of Rs 617.36 crore in Q1 June 2019.
Total income gained 5.2% to Rs 4,316.24 crore in Q1 June 2020 over Rs 4,103.57 crore in Q1 June 2019. Pre-tax profit stood at Rs 127.55 crore in Q1 June 2020 as against pre-tax loss of Rs 963.02 crore in Q1 June 2019. The result was declared post market hours yesterday, 28 July 2020.
The bank's gross non-performing assets (NPAs) stood at Rs 1,741.66 crore as on 30 June 2020 as against Rs 2,279.56 crore as on 31 March 2020 and Rs 2,418.56 crore as on 30 June 2019. The ratio of gross NPAs to gross advances stood at 1.99% as on 30 June 2020 as against 2.60% as on 31 March 2020 and 2.66% as on 30 June 2019. The ratio of net NPAs to net advances stood at 0.51% as on 30 June 2020 as against 0.94% as on 31 March 2020 and 1.35% as on 30 June 2019.
The bank's provisions and contingencies declined 40.34% to Rs 764.08 crore in Q1 FY21 over Rs 1280.75 crore in Q1 FY20. Provision Coverage Ratio (PCR) on NPA accounts improved to 74.93% at 30 June 2020 as compared to 49.76% at 30 June 2019 and 64.53% at 31 March 2020.
In the first phase of moratorium, the bank took COVID-19 related provision worth Rs 225 crore through the profit and loss account in the quarter ending on 31 March 2020. During Q1 FY21, the bank has created additional COVID-19 related provision of Rs 375 crore to further strengthen the balance sheet.
IDFC First Bank's Q1 FY2021 Net Interest Income (NII) grew 38% Y-o-Y (year-on-year) to Rs 1,626 crore from Rs 1,174 crore in Q1 FY2020. Despite the COVID-19 pandemic and lockdown impact, the Q-o-Q (quarter-on-quarter) NII grew by 4%. Net Interest Margin (quarterly annualized) (NIM) rose to 4.53% in Q1 June 2020 from 3.01% in Q1 June 2019.
Fee and other income (without trading gains) dropped 54% to Rs 148 crore in Q1 FY21 as compared to Rs 321 crore in Q1 FY20 due to lower loan originations and reduced banking activity on account of COVID-19 pandemic and related lockdown throughout the country. The trading gain for Q1 FY21 was at Rs 337 crore.
Current Account-Savings Account (CASA) deposits posted strong growth of 145% Y-o-Y (year-on-year) to Rs 23,491 crore as on 30 June 2020 as compared to Rs 9,594 crore as on 30 June 2019. CASA ratio improved to 33.74% as on 30 June 2020 as compared to 14.57% as on 30 June 2019. As of 30 June 2020, the net worth of the bank was Rs 17,436 crore.
The bank focused on growing the retail loan book and decreased the wholesale loan book including infrastructure loans to reduce concentration risk on the portfolio. Out of the total book mentioned above, retail loan book jumped 26% to Rs 56,043 crore as on 30 June 2020 as compared to Rs 44,642 crore as on 30 June 2019.
During Q1 FY2021, the nation-wide lockdown due to COVID-19 pandemic stayed for the entire first two months of the last quarter and practically continues till now in the localized manner in some of the key business locations including main cities in India. In the midst of such situation, the bank continued to service its customers in all possible ways emphasizing on technology driven solutions and grew its business gradually, both for deposits and loans.
The branches of the bank have remained open during this emergency time and the employees have efficiently helped their customers for all their needs in this situation, while remaining under the guidelines as prescribed by the Government Authorities. The Bank introduced video-based KYC to onboard customers remotely in a completely touch-free way during the last quarter.
During May 2020, the RBI also announced the second phase of moratorium till end of August 2020 and IDFC First Bank accordingly extended moratorium to its eligible customers. For the second phase, till date, the bank has provided moratorium to about 28% of its customers based on the value, out of which 23% is in retail assets including rural portfolio and 35% is in the wholesale financing portfolio.
Commenting on the Q1 result, V Vaidyanathan, the managing director (MD) and chief executive officer (CEO) of IDFC First Bank, has said that: "We are happy to inform that we continue to progress well on all parameters as per the guidance provided for the bank. Further, we have liberally provided moratorium to customers who sought it, and our moratorium was about 45% last quarter. This has reduced to 28% now, which we expect to fall below 10% by August 31, 2020 based on the strong improving trend in collections we are experiencing."
IDFC First Bank provides a range of financial solutions to individuals, small businesses and corporates. As of 30 June 2020, the bank has 503 branches and 417 ATMs across the country.
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