Monday, 10 May 2021

IDFC FIRST Bank Q4 FY21 - Financial Results

 PAT:  Rs. 128 crore in Q4-FY21 as compared to Net Profit of Rs. 72 crore in Q4-FY20. For the full year, PAT was Rs. 452 crore in FY21 as compared to loss of Rs. 2,864 crore in FY20.

·         NII: Grew by 15% YoY basis to reach Rs. 1,960 crore in Q4-FY21.

·         NIM%: 5.09% in Q4-FY21 as compared to 4.61% in Q4-FY20.

·         Total Income grew by 14% YoY basis to reach Rs. 2,801 crore in Q4 FY21.

·         CASA ratio: 51.75% as of March 31, 2021, as compared to 31.87% as of March 31, 2020.

·         Average CASA ratio: 50.23% as of March 31, 2021, as compared to 27.72% as of March 31, 2020.

·         CASA balance: Grew by 122% YoY basis to reach Rs. 45,896 crore.

·     Reduced Savings Rates: Bank reduced savings account interest rates to 4% for < 1 lac deposits and peak rates of 5%, effective May 1, 2021, because of surplus liquidity.

·         Bank started offering of Prime Home Loans to employees of top corporates starting at 6.9%.

·         Overall Customer Deposits: Rs. 82,725 crore (grew by 43% YoY, 7% QoQ).

·         Overall Funded Asset: Rs. 1,17,127 crore (grew by 9% YoY, 6% QoQ).

·         Retail Loan Assets: Rs. 73,673 crore (grew by 26% YoY excluding ECLGS, 11% QoQ).

·       Asset quality: GNPA and NNPA at 4.15% and 1.86% respectively (PCR at 56%). Including COVID provisions of Rs. 375 crs created in Q4-2021, the PCR would be 65%.

·         Restructured Book (approved & implemented) of the Bank stood at 0.9% of the overall funded assets.

·    Capital Adequacy Ratio: Strong at 16.32% including equity capital raised on April 6, 2021, with CET-1 ratio at 15.62%. Excluding the equity capital raise, the Capital Adequacy is reported at 13.77%, with CET 1 at 13.27%.

·         Average Liquidity Coverage Ratio (LCR): Average at 153% for Q4-FY21.

V Vaidyanathan, Managing Director and CEO, IDFC FIRST Bank, said, “Including the equity capital of Rs. 3000 crore raised through QIP on April 6, 2021, our overall capital adequacy is strong at 16.32%. We maintain high levels of liquidity with liquidity coverage ratio of 153%. We therefore approach FY 22 with strength and confidence.

Strong inflows from retail customers based on our strong brand, our excellent service levels, and strong product proposition has resulted in surplus liquidity at the Bank. Our CASA grew 122% last year and we reached a record CASA ratio of 51.75%.  We have therefore reduced our savings rates to as low as 4% and peak savings rates to 5%, effective May 1.

This reduction of savings rates to market benchmarks is a seminal moment in our journey as a Bank, as we will now be able to participate in the Prime Home loans market, which is largely to employees of top Corporates. The Bank has started offering prime Home loans at as low as 6.9%. This will set the Bank up for perennial growth with even better asset quality going forward.

Our home loan book grew strongly at 37% during FY21. Home loans is a large Rs. 25 lac crore market in India and home loans will continue to be our key business line going forward as well.

When COVID 1.0 struck in March 2020, we made necessary changes by restricting lending to COVID affected industries and by tightening credit norms accordingly. Thus the loans booked after June 2020 already factor in the COVID impact, and are in fact behaving better than pre-COVID bookings, adjusted for like-to-like vintage.

On the collections front, we’re happy to report that our collection efficiency for early buckets in March ‘21 reached 100% of pre-Covid (Jan- Feb 2020) levels. We will closely watch the impact of COVID second wave and deal with the situation accordingly. Our bounce back of collections to 100% when economic activity revived in H2 2021 demonstrates that our underlying portfolio quality is high and when the economy revives, customers do start repaying well again.

With accelerated digital initiatives, new product launches including credit cards, and significant investment in creating superior customer experience, the Bank is now on a strong footing to participate in the emerging opportunities of FY22.”

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