IDFC First Bank shares surge 8% on Q2 earnings

IDFC-First-Bank

Shares of IDFC First Bank today rose as much as 8% ?41.95 after the lender posted profit before tax of ?100 crore for the quarter ended September 30, 2019, as compared to a loss of ?583 crore in the corresponding period last year. Overall, the bank posted a net loss (after tax) of ?680 crore for the quarter, as a result of one-time tax impact of ?751 crore due to markdown of existing deferred tax assets.

The net NPA of the bank was stable at 1.17% as compared to 1.35% as of June 30, 2019. Gross NPA of the bank also remained stable at 2.62% in Q2 FY 20 as compared to 2.66% as of Q1 FY 20.

Net interest income for the quarter was at Rs. 1,363 crore, up 202% Y-o-Y from ?451 crore (pre-merger), and up 16% QoQ (Rs. 1,174 crore).

Net interest margin for the quarter also rose sharply to 3.43% from 3.01% in the previous quarter Q1 FY 20, and as compared to 1.56% pre-merger.

V Vaidyanathan, managing director and CEO of IDFC FIRST Bank, said: “We are delighted to post a profit before tax of Rs. 100 crores for Q2 FY 20, which represents a strong revival of profitability. The bank is ahead of its plans for the five-year strategic growth path guided earlier.”

The bank, which was formed with the merger of infra-focused IDFC Bank and the non-bank lender Capital First in January 2019, reduced its loan book by over ?5,000 crore to focus only on retail loans during the quarter, which now constitute 45% of the book.

While the overall loan book has gone down, it is a more profitable growth as the retail loans are more profitable and has grown by ?3,400 crore last quarter, Vaidyanathan said.

The provisions for bad loans went up to ?1,294 crore from ?1,203 crore in June.

From a stress perspective, the bank said it has two identified accounts of a non-bank lender and a housing finance company with an aggregate exposure of ?1,231 crore, on which it is already carrying a 75%.

It also flagged one account in the infra space of ?985 crore where it is carrying provisions of only 15%, wherein the cashflows are strong but repayments are behind schedule. “This account is a performing tolling concession road with strong cash flows but repaying behind schedule, hence flagged,” the lender said.

News Source:- livemint

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