Q1 FY 2023 Review

IDFC First Bank reported net revenue of ₹4,08,930 Lakhs for the quarter ended June 30, 2022, compared to ₹4,92,174 lakhs for June 30, 2021. Profit After Tax was ₹48,501 lakhs for the quarter ended June 30, 2022, as compared to (₹62,117) lakhs during the corresponding quarter of the previous year, respectively.

IDFC FIRST Bank - Investment Summary

Overview

• IDFC First Bank is engaged in the business of banking services.

• As of June 30, 2022, the bank has 651 branches and 807 ATMs across India.

• Bank has been assigned AA stable and A1+ on the existing debt instruments by Crisil Rating Agency.

• Allotment of 9,95,540 equity shares of the face value of ₹10 each to eligible employees under the stock option scheme.

IDFC FIRST Bank -Quarterly Summary

Business

• IDFC First Bank came into effect on December 18, 2018, after the merger of IDFC Bank Limited and Capital First Limited.

• About IDFC Bank Limited:

  • IDFC Bank was initially established as IDFC Limited in 1994 to facilitate infrastructure finance in the country.

  • In 2014, IDFC Limited got a banking license from RBI and IDFC Bank launched operations on October 01, 2015.

  • Post-conversions to the bank, all the lending business of IDFC Limited was transferred to IDFC Bank.

• About Capital First:

  • Mr. V Vaidyanathan started Capital First limited in 2012 after acquiring an existing non-banking financial company through a management buyout (MBO) backed by private equity.

  • Before MBO, the NBFC was primarily engaged in corporate lending but transformed into a retail lender with a focus on consumer and small and medium enterprise segments after the buyout.

  • The MBO turned around the company from losses of ₹32 crores in FY 2010 to a net profit of ₹327 crores in FY 2018.

  • The asset under management of Capital First Limited grew at a CAGR of 29% over 5 years till March 2018, while profit grew at a 5-year CAGR of 56%.

• Post-merger, IDFC Bank and Capital First Limited and its subsidiaries were renamed as IDFC First Bank Limited.

• During the initial quarters of the post-merger, the bank recognized the financial troubles they faced because of legacy accounts and provided the provision for the same. They also invested in expanding their reach to build up a strong retail franchise.

• IDFC First Bank’s operation span across various business segments comprising:

  • Treasury:

    • The treasury segment primarily consists of the group’s investment portfolio, money market borrowing and lending, operations, and foreign exchange and derivatives portfolio of the bank.

    • Revenue of the treasury segment consists of interest income on the investment portfolio, inter-segment revenue, gains or losses from trading operations, trades, and capital market deals.

  • Corporate/ Wholesale Banking:

    • The wholesale banking segment provides loans, non-funded facilities, loan syndication, and transaction services to corporate relationships non-included under retail banking.

    • Revenue from the wholesale banking segment consists of interest earned on loans to customers, inter-segment revenue, interest/ fees earned on transaction services, earnings from trade services, fees on client FX & derivatives, and other non-funded facilities.

  • Retail Banking:

    • Retail Banking constitutes lending to individuals/ business banking customers through the branch network and other delivery channels subject to the orientation, nature of the product, the granularity of the exposures, and the quantum thereof.

    • Revenue of the retail banking segment is derived from interest earned on retail loans, inter-segment revenue and fees from services rendered, fees on client FX & derivatives, and other non-funded facilities.

  • Other Banking Business:

    • This segment includes revenue from the distribution of third-party products.

• Out of the total revenue, 29% has been generated from Treasury operations, 16% from Corporate/wholesale Banking, 54% from Retail Banking, and 1% from others in FY 2022 compared to 34%, 19%, 47%, and 0% in FY 2021, respectively.

IDFC FIRST Bank - Revenue Trend

IDFC FIRST Bank - Ratio Analysis

IDFC FIRST Bank - Financial Overview

IDFC FIRST Bank - Profit and Loss Statement (₹ in crores)