IDFC First Bank Eyes Rs 6 Lakh Cr In Deposits, Rs 12,000 Cr Profit By FY29

With an aim to build a world-class bank in India, IDFC First Bank has unveiled an ambitious roadmap for its Vision 2.0 and aims for Rs 6 lakh crore in deposits and Rs 5 lakh crore in loans by the financial year (FY) 2029.

“We’re now working towards our Vision 2.0, aiming for ~Rs. 6,00,000 crore in deposits, ~Rs. 5,00,000 crore in loans, and ~Rs. 12,000 crore in PAT by FY 29,” said V Vaidyanathan, Managing Director (MD) and Chief Executive Officer (CEO), IDFC First Bank.

Notably, because the bank transitioned from an infrastructure Development Finance Institution (DFI) with a net interest margin (NIM) of 1.7 per cent to a commercial bank, it had a situation of low retail deposits (CASA of 8.7 per cent) and early-stage losses in 2019. “Renowned analysts then called it a hard-to-solve paradox, because if we invested in people, technology, and branches, we would post more losses, if we didn't invest, we couldn’t address the issue,” stated Vaidyanathan.

Notably, the company posted a profit after tax (PAT) of Rs 2947 crore in FY2024 and simultaneously increased CASA to 47 per cent. “With the dedication of our colleagues, we’ve addressed this paradox in five years. Four rating agencies Crisil, Icra, India Ratings, and Care have upgraded our long-term credit rating to AA+ stable. We will now strive for AAA,” added Vaidyanathan.

Interim fluctuations aside, Vaidyanathan informed that IDFC First Bank’s share price has risen from Rs 37.6 at the merger in December 19 to Rs 75.4 as of 31 March 2024, up 101 per cent, compared to a 57 per cent rise in the Nifty Private Bank index.

DFC First Bank's customer deposits have surged from Rs 38,455 crore to Rs 1,93,753 crore, while retail deposits have grown from Rs 10,400 crore to Rs 1,51,343 crore. Additionally, its current account and savings account (CASA) ratio has seen a significant jump from 8.7 per cent to 47.2 per cent.

Talking about the asset quality, the bank's credit deposit ratio is down from 137 per cent to 98.4 per cent and repaying Rs 61,342 crore of legacy borrowing and CDs. Gross non-performing assets (NPAs) have decreased from 2.43 per cent to 1.88 per cent at the bank level, while net NPAs have reduced from 1.27 per cent to 0.60 per cent.

Furthermore, IDFC First Bank's net worth has increased from Rs 18,159 crore to Rs 32,161 crore and its capital grew from 15.47 per cent to 16.11 per cent. The bank's core operating profit has grown from Rs 749 crore in FY19 to Rs 6,030 crore in FY24, and its net earnings have turned around from a loss of Rs 1,944 crore in FY19 to a PAT of Rs 2,957 crore in FY24.