Mumbai, July 30, 2023.

The Board of Directors of IDFC FIRST Bank, in its meeting held today, approved the unaudited financial results for the quarter ended June 30, 2023.

Profitability

Net Profit for Q1-FY24 grew 61% YOY from Rs. 474 crore in Q1-FY23 to Rs. 765 crore in Q1-FY24 driven by strong growth in core operating income. Core Operating Profit (pre provision operating profit excluding trading gains) grew strongly by 45% YOY from Rs. 987 crore in Q1-FY23 to Rs. 1,427 crore for the quarter Q1-FY24.

Net Interest Income (NII) grew 36% YOY from Rs. 2,751 crore in Q1-FY23 to Rs. 3,745 crore in Q1- FY24.

Net interest Margin (gross of IBPC and selldown) was 6.33% in Q1-FY24 as compared to 5.77% in Q1- FY23 and 6.41% in Q4-FY23 Fee and Other Income grew by 49% YoY from Rs. 899 crore in Q1-FY23 to Rs. 1,341 crore in Q1-FY24. Retail fees constitute 91% of the overall fees for the quarter Q1-FY24. Core Operating income (NII plus Fees, excluding trading gains) grew 39% from Rs. 3,650 crore in Q1- FY23 to Rs. 5,086 crore in Q1-FY24.

Operating Expense grew by 37% YoY from Rs. 2,663 crore in Q1-FY23 to Rs. 3,659 crore in Q1-FY24, primarily on account of employee increments, branch expansion and increase in business volumes. Provisions increased 55% YOY from Rs. 308 crore in Q1-FY23 to Rs. 476 crore in Q1-FY24. The credit cost (quarterly annualized) as % of average funded assets for Q1-FY24 was 1.16% as against 1.26% in Q4-FY23. RoA (annualized) improved from 0.97% in Q1-FY23 to 1.26% in Q1-FY24.

RoE (annualized) improved from 8.96% in Q1-FY23 to 11.78% in Q1-FY24, including the impact of about 60 bps due to equity capital raise in March 2023.

Deposits & Borrowings

Customer Deposits increased by 44% YoY from Rs. 1,02,868 crore as of June 30, 2022 to Rs. 1,48,474 crore as of June 30, 2023. CASA Deposits grew by 27% YoY from Rs. 56,720 crore as of June 30, 2022 to Rs. 71,765 crore as of June 30, 2023.

CASA Ratio reduced from 50.0% as of June 30, 2022 to 46.5% as of June 30, 2023, because of shift from savings accounts to term deposits due to prevailing interest rates.

Retail deposits grew by 51% YoY from Rs. 75,800 crore as of June 30, 2022 to Rs. 1,14,272 crore as of June 30, 2023. Retail deposits constitutes 77% of total customer deposits as of June 30, 2023. Legacy High Cost Borrowings reduced from Rs. 22,406 crore as of June 30, 2022 to Rs. 16,055 crore as of June 30, 2023.

Funded Assets

Funded assets (including advances & credit substitutes) increased by 25% YoY from Rs. 1,37,663 crore as of 30 June 2022 to Rs. 1,71,578 crore as of June 30, 2023.

The Bank continues to wind down infrastructure financing as per stated strategy and now constitutes only 2.2% of total funded assets as of June 30, 2023.

Exposure to top 20 single borrowers reduced from 9% as of June 30, 2022 to 7% as of June 30, 2023. Assets Quality Gross NPA (GNPA) of the bank has improved to 2.17% as of 30 June 2023 from 3.36% of 30 June 2022 and 2.51% as of 31 March 2023.

Net NPA (NNPA) of the bank has improved to 0.70% as of 30 June 2023 from 1.30% of 30 June 2022 and 0.86% as of 31 March 2023.

GNPA of the Retail, Rural and SME Finance has improved to 1.53% as of 30 June 2023 from 2.12%

of 30 June 2022 and 1.65% as of 31 March 2023.

NNPA of the Retail, Rural and SME Finance has improved to 0.52% as of 30 June 2023 from 0.93%

of 30 June 2022 and 0.55% as of 31 March 2023.

Excluding the infrastructure financing book which the Bank is running down, the GNPA and NNPA

of the Bank would have been 1.71% and 0.44% respectively as of June 30, 2023.

SMA-1 and SMA-2 (31-90 DPD which is the pre-NPA stage) in Retail, Rural and SME Finance portfolio has reduced from 1.25% as of June 30, 2022 to 0.85% as of June 30, 2023.

Collection efficiency for urban retail business (excluding prepayments and EMI arrears) in current bucket continues to remain high at 99.5%.

Provision coverage ratio of the bank has increased to 83.12% as of June 30, 2023 from 73.13% as of June 30, 2022.

Standard restructured book stood at 0.47% of the funded asset book as against 1.27% at June 30, 2022 and 0.59% at March 31, 2023.

Capital Position & Liquidity

Capital Adequacy of the Bank was strong at 16.96% with CET-1 Ratio at 13.70% as on June 30, 2023.

Average LCR was strong at 125% for the quarter ending on June 30, 2023.

Mr. V Vaidyanathan, Managing Director and CEO, IDFC FIRST Bank, said, “We continue to build a strong franchise with a high CASA Ratio of 46.5%. Our retail deposits are growing well, based on our strong positive brand, ethics, customer-friendly products and digital innovations.

We are happy to share that our asset quality continues to remain strong. On the Retail, Rural & SME business, where our Bank particularly specializes in, the Gross NPA has come down to as low as 1.53% and the Net NPA has come down to 0.52%.

We are happy to state that we have registered profit of Rs. 765 crore in Q1-FY24, representing a growth of 61% over PAT of Rs. 474 crore in Q1 FY 23.

During the last four years, we underwent some transformational changes at our Bank. During the period, we got terrific support from all of our shareholders and customers, and we thank you all for the same. We are confident of improving our performance from here on.”