IDFC First Bank shares surge as lender posts profit in Q4

IDFC-First-Bank

Shares of IDFC First Bank today surged as much as 7% today to ?20.20 after the lender swung to profit in the March quarter. IDFC First Bank on Friday reported a consolidated net profit of ?76.36 crore for January-March 2020.

The private sector lender had posted a loss of ?212 crore during the corresponding January-March quarter a year ago.

Sequentially, there was a net loss of ?1,631.59 crore in the third quarter ended December 2019.

The bank said that in view of accounting for IDFC – CFL (Capital First Ltd) merger from appointed date of October 1, 2018, the figures of the year ended March 31, 2020, are not comparable.

The figures for the previous quarter/year have been regrouped wherever necessary in order to make them comparable, IDFC First Bank said in a regulatory filing.

Total income during the fourth quarter of FY20 rose to ?4,553 crore as against ?3,971 crore during the same period of FY19.

For the full year 2019-20, the bank witnessed widening of net loss at ?2,843.39 crore as against ?1,907.88 crore in the previous fiscal.

Income during the year rose to ?17,962.72 crore from ?13,056.17 crore.

On the asset front, the gross non performing assets (NPAs) or bad loans as a percentage of gross loans as on March 31, 2020 increased to 2.60 per cent from 2.43 per cent by year ago same period.

However, net NPAs improved to 0.94 per cent as against 1.27 per cent.

IDFC First Bank said that the board at its meeting had an enabling resolution for borrowing of funds through issue of debt instruments, on private placement basis, up to an amount not exceeding ?5,000 crore.

The extent to which the COVID-19 pandemic will impact the bank’s results will depend on future developments, which are highly uncertain, including, among other things, any new information concerning the severity of the COVID-19 pandemic and any action to contain its spread or mitigate its impact whether government-mandated or elected by the bank.

“The bank’s capital and liquidity position is strong and would continue to be the focus area for the bank during this period,” it said.

The bank said as per RBI March guidelines on regulatory package, it has granted a moratorium of three months on the payment of all installments and / or interest, as applicable, falling due between March 1, 2020 and May 31, 2020 to all eligible borrowers.

The bank has created additional provisions amounting to ?225 crore during Q4 FY2020 against the potential impact of COVID-19 on standard assets based on all the available information at this point in time.

Provisions for bad loans and contingencies for the quarter under review were of ?412.38 crore, lower than ?655.31 crore parked aside a year ago.

V Vaidyanathan, managing director and CEO, IDFC First Bank, said, “We are happy to inform that deposits for our Bank are coming thick and strong.”

In Q4 FY20, “we saw strong inflows into our bank as retail deposits increased by ?4,658 crore, despite the turmoil in the markets. Once the lockdown lifts, things will only get better for both lending as well as deposits as the economic activity will pick up. We are already seeing this that where locations are opening up from lockdown, demand is strong”, he said.

Further, by raising ?2,000 crore of fresh equity capital and reaching strong capital adequacy of 15.5 per cent, the bank is in a strong position to grow from here on, he said.

Private sector IDFC First Bank on Monday said its senior management has voluntarily taken pay cut of 10 per cent due to coronavirus pandemic, while the CEO offered to surrender as much as 30 per cent of his salary.

The senior management has volunteered to take a 10 per cent cut in compensation in the current financial year 2020-21, IDFC First Bank said in a statement.

IDFC FIRST Bank MD & CEO V Vaidyanathan has voluntarily offered to take a pay cut of 30 per cent in his compensation including fixed compensation as well as all allowances, the bank said.

The Bank has honoured all offers that were made to new hires before the pandemic, including all lateral hires as well as 550 management trainees, it added.

This is in keeping with the bank’s philosophy of honouring its commitments in all circumstances, it said.

The bank also paid 100 per cent variable pay to 78.2 per cent of employees for the period pertaining to 2019-20 despite the arrival of the pandemic, IDFC First Bank said. (With Agency Inputs)

News Source:- livemint

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