IDFC FIRST Bank delivered its strongest quarterly performance to date, reporting a record profit after tax (PAT) of ₹1,075 crore for the first quarter of FY27, more than doubling from ₹463 crore in the corresponding quarter last year, driven by improved margins, healthier asset quality and robust business growth.
The bank’s net interest margin (NIM) expanded to 5.96% during the quarter from 5.71% a year earlier, while profitability benefited from lower credit costs and improving operating leverage.
Business momentum remains strong
Total customer business, comprising loans and customer deposits, rose 18.6% year-on-year to ₹6,04,776 crore as of June 30, 2026.
Loans and advances increased 20.6% to ₹3,05,370 crore, supported by strong demand across mortgages, vehicle finance, consumer lending and corporate loans.
The bank’s Retail, Agriculture and MSME (RAM) portfolio grew 18.2% to ₹2,41,118 crore, while the wholesale loan book expanded 30.4% to ₹64,252 crore, reflecting broad-based credit growth.
Margins and efficiency improve
The lender continued to improve its operating efficiency during the quarter. The cost-to-income ratio, excluding trading gains, improved to 70.7%, compared with 73.8% in the year-ago period, reflecting better operating leverage.
Fee income as a percentage of average total assets improved to 2.09%, while operating expenses, excluding the impact of the fraud incident reported in the previous quarter, increased only 2.3% sequentially.
Asset quality strengthens
IDFC FIRST Bank reported continued improvement in asset quality, with gross non-performing assets (GNPA) declining to 1.51% and net NPAs reducing to 0.44%.
Loan loss provisions fell significantly to 1.53% of average loans, compared with 2.69% in the corresponding quarter last year, highlighting lower credit stress across the portfolio.
During the quarter, the bank received ₹514.8 crore under the Credit Guarantee Fund for Micro Units (CGFMU) scheme relating to its microfinance portfolio.
At the same time, it created a contingency provision of ₹515 crore as a prudent measure to cushion against potential macroeconomic risks, including uncertainties arising from the monsoon and fuel price volatility.
Capital position remains healthy
The bank maintained a strong capital base, with a capital adequacy ratio of 15.05%, including a Common Equity Tier-I (CET-I) ratio of 13.33%, providing adequate headroom to support future business growth.
Management optimistic
IDFC FIRST Bank Managing Director and CEO V Vaidyanathan said the bank continues to focus on building a high-quality banking franchise backed by strong governance standards.
“We are seeing strong business momentum. Our asset quality continues to improve, with gross NPA at 1.51% and net NPA at 0.44%. Our provisions as a percentage of loans continue to decline,” he said.
Vaidyanathan added that while the bank received ₹515 crore under the CGFMU scheme during the quarter, it had created an equivalent contingency provision to safeguard against possible macroeconomic uncertainties.
He said the benefits of sustained investments in strengthening the franchise are beginning to reflect in improving operating leverage, helping the bank achieve its highest-ever quarterly profit while return on assets (RoA) crossed 1% for the first time.