NEW DELHI: IDFC First Bank reported a 196.5 per cent year-on-year jump in profit after tax to Rs 1,045 crore in the September quarter of FY27, supported by strong growth in core operating profit and an improvement in asset quality.Core operating profit, excluding trading gains, rose 38.5 per cent to Rs 2,527 crore. Net interest income (NII) increased 21 per cent to Rs 6,184 crore, while fee and other income grew 24.5 per cent to Rs 2,285 crore.Total loan assets, including credit substitutes and loans backed by foreign currency non-resident bank (FCNR(B)) deposits, rose 30.1 per cent year-on-year to Rs 3,46,913 crore as of September 30, 2026. Excluding FCNR(B)-backed loans, growth stood at 22.2 per cent on a gross basis, including inter-bank participation certificates (IBPC).Total deposits increased 25.9 per cent year-on-year to Rs 3,48,583 crore. The bank mobilised Rs 34,390 crore in FCNR(B) deposits during the quarter, taking advantage of its digital capabilities despite having no branch, subsidiary or representative office outside India.The bank said the FCNR(B) deposits, largely carrying tenures of three to five years, would provide structural liquidity in the coming years. Their fully loaded cost, including priority sector lending benefits, is approximately 1 per cent lower than the cost of raising domestic fixed deposits.The bank’s average current account and savings account (CASA) ratio stood at 48.4 per cent during the quarter, compared with 50.1 per cent in the preceding quarter. Management attributed the decline primarily to the large mobilisation of FCNR(B) deposits.Asset quality improved, with gross non-performing assets (GNPA) declining to 1.32 per cent from 1.86 per cent a year earlier. Net NPA stood at 0.40 per cent, against 0.53 per cent in the year-ago period. Credit cost, as a percentage of average assets, declined to 1.01 per cent in Q2 FY27.The bank’s return on assets (RoA) stood at 0.93 per cent for the quarter, while core RoA improved to 0.92 per cent from 0.88 per cent in the June quarter, excluding interest received on an income tax refund in Q1 FY27.Management said operating expenses had grown more slowly than income by over 500 basis points year-on-year for two consecutive quarters. The core cost-to-income ratio improved to 70.16 per cent in Q2 FY27 from 70.73 per cent in the preceding quarter.The bank also said the benefits of FCNR(B) deposit mobilisation, cost savings, product changes and expected repo rate increases could broadly offset the anticipated impact of the Insurance Regulatory and Development Authority of India’s consultation paper on insurance commissions on profitability in FY28.
