IDFC First Bank Shares Jump 7% On Turning Profitable In Q4

Shares of IDFC First Bank gained as much as 7.1 percent to Rs 20.2 apiece on Tuesday. On 22 May, the private lender reported a profitable quarter with a consolidated net profit of Rs 76.36 crore for January-March 2020 period. In the same quarter a year ago, it had posted a loss of Rs 212 crore whereas for December 2019 ended quarter, it reported a net loss of Rs 1,631.59 crore.

The bank, however, said that in view of accounting for IDFC - CFL (Capital First Ltd) merger from appointed date of 1 October 2018, the figures of the year ended 31 March 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.

The lender's total income during the fourth quarter of the financial year 2019-20 rose to Rs 4,553 crore as against Rs 3,971 crore during the same period of the previous year. For the full year 2019-20, the bank witnessed widening of net loss at Rs 2,843.39 crore as against Rs 1,907.88 crore in the previous fiscal. Income during the year rose to Rs 17,962.72 crore from Rs 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 31 March 2020 increased to 2.60 percent from 2.43 percent by year ago same period. However, net NPAs improved to 0.94 percent as against 1.27 percent.

Its NII (non interest income) grew by 40 percent to Rs 1,563 crores in the March ended quarter when compared to Rs 1,113 crores a year ago.

IDFC First Bank also said that its board has enabled a resolution for borrowing of funds through issue of debt instruments, on private placement basis, up to an amount not exceeding Rs 5,000 crore.

The bank has created additional provisions amounting to Rs 25 crore in Q4 against the potential impact of COVID-19 on standard assets.

"The Bank was required to make COVID-19 related provision of Rs. 25 crores pertaining to accounts where asset classification benefit was given. The Bank has provided the entire amount in Q4-FY20 itself and has additionally taken Rs. 200 crores of COVID-19 related provisioning proactively for over-dues of 1-89 days taking total COVID-19 provisions to Rs. 225 crores. Including this, the total provisions for Q4FY20 was Rs. 679 crores," the bank said.

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 the quarter under review, it saw "strong inflows into our bank as retail deposits increased by Rs 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, the bank also paid 100 percent variable pay to 78.2 percent of employees in relation to 2019-20 despite the arrival of the pandemic, IDFC First Bank said.