Bank IDFC FIRST reports an approximately 60% decline in net profit, amounting to 295.6 crore rupees, in the fourth quarter of FY25.
Mumbai's Private Lender in a Slump: IDFC FIRST Bank reported a substantial dip in its profits for Q4 of the current financial year FY25. Instead of the usual high of Rs 731.9 crore, the bank posted a net profit of just Rs 295.6 crore, that's a whopping 60% decline compared to the previous year's Q4. For the full financial year FY25, the net profit stood at Rs 1,490 crore, a nearly 50% drop from Rs 2,942 crore a year before.
Breaking it down, Net Interest Income (NII) recorded a growth of 9.8% year-on-year (YoY) from Rs. 4,469 crore in Q4 FY24 to Rs. 4,907 crore in Q4 FY25. For the entire FY25, the NII growth surged by 17.3% on a YoY basis. Core operating income registered an impressive 8.7% increase from Rs 6,079 crore in Q4 FY24 to Rs. 6,609 crore in Q4 FY25. The YoY growth for operating income was 16.7%.
Customer deposits witnessed a substantial surge of 25.2%, climbing from Rs 1,93,753 crore as of March 31, 2024, to Rs 2,42,543 crore as of March 31, 2025. Retail deposits bolstered by 26.4%, rising from Rs. 1,51,343 crore as of March 31, 2024, to Rs. 1,91,268 crore as of March 31, 2025. The bank's CASA deposits followed suit, surging by 24.8% from Rs. 94,768 crore to Rs. 1,18,237 crore in the same period.
Gross non-performing assets (NPAs) improved marginally by 7 basis points (bps) quarter-over-quarter (QoQ) from 1.94% as of December 31, 2024, to 1.87% as of March 31, 2025. Meanwhile, net NPAs slightly edged up by 1 bps QoQ from 0.52% as of December 31, 2024, to 0.53% as of March 31, 2025.
Loans and advances swelled by 20.4% during the period, rising from Rs 2,00,965 crore to Rs 2,41,926 crore. The gross slippage for Q4 FY25 was Rs. 2,175 crore compared to Rs 2,192 crores in Q3 FY25, a reduction of Rs 17 crore.
While several factors contributed to the decline in IDFC FIRST Bank's net profit in Q4 FY25, the bank still managed to record a strong growth in some core areas. For instance, despite the challenges, the bank saw a notable increase in Net Interest Income (NII) and a significant growth in customer deposits, demonstrating the resilience of certain business areas. However, the bank experienced a considerable decline in its microfinance loan portfolio, increased bad loans, a narrowing Net Interest Margin (NIM), and a rise in operating expenses, all of which affected the bank's profitability[2][4].
- In Q4 of FY25, despite consolidated net profit dropping to Rs 295.6 crore, IDFC FIRST Bank managed to achieve a 9.8% year-on-year growth in Net Interest Income (NII), reaching Rs 4,907 crore.
- For the personal-finance savvy investor, it's worth noting that the bank's full-year FY25 profit also witnessed a substantial decline, falling to Rs 1,490 crore from Rs 2,942 crore in the previous year.
- In the same year, customer deposits showed impressive growth, with a 25.2% increase from Rs 1,93,753 crore to Rs 2,42,543 crore, highlighting the bank's ability to attract more business.
- However, the bank's financial health in Q4 FY25 saw a rise in non-performing assets and bad loans, which contributed to the decline in net profit, signaling potential risks for personal-finance investors.
