Mumbai (Maharashtra) [India]: Financial outcomes: The audited financial results for the quarter and year ending March 31, 2025, were released by IDFC FIRST Bank today.

A. Loans and Deposits

* From Rs. 1,93,753 crore on March 31, 2024, to Rs. 2,42,543 crore on March 31, 2025, customer deposits grew 25.2% year over year.

* From Rs. 1,51,343 crore on March 31, 2024, to Rs. 1,91,268 crore on March 31, 2025, retail deposits increased by 26.4% year over year.

* From Rs. 94,768 crore on March 31, 2024, to Rs. 1,18,237 crore on March 31, 2025, CASA Deposits increased by 24.8% YoY.

* As of March 31, 2025, the CASA Ratio was 46.9% (compared to 47.2% on March 31, 2024).

* As of March 31, 2025, 79% of all client deposits are retail deposits.

B. Other Companies

* The Bank’s credit cards surpassed the 3.5 million milestone in the most recent quarter.

* The total assets under management (including deposit balances) increased 27% year over year to reach Rs. 42,665 crore.

* FASTag: With 17.8 million active FASTags, the bank continues to be the biggest issuing bank.

C. Advances and Loans

From Rs. 2,00,965 crore on March 31, 2024, to Rs. 2,41,926 crore on March 31, 2025, loans and advances grew by 20.4% year over year.

* From Rs. 1,66,604 crore on March 31, 2024, to Rs. 1,97,568 crore on March 31, 2025, the retail, rural, and MSME book increased by 18.6% year over year.

* The microfinance portfolio shrank 28.3% year over year, and its share of the total loan book decreased from 6.6% in March 2024 to 4.0% in March 2025.

* As of March 31, 2025, the Bank’s legacy infrastructure book had decreased 17% year over year to Rs. 2,348 crore, or less than 1% of the Bank’s total financed assets.

* Credit substitutes are included in loans and advances.

D. Quality of Assets

The bank is keeping a careful eye on the microfinance sector due to the rise in delinquencies in this sector overall. SMA, gross non-performing assets (NPAs), net non-performing assets (NPAs), and book provisions (excluding MFI) are all stable measures of asset quality.

1. NPA Information:

* The Bank’s gross non-performing assets (NPA) increased by 7 basis points on a quarterly basis, from 1.94% on December 31, 2024, to 1.87% on March 31, 2025.

* From 0.52% on December 31, 2024, to 0.53% on March 31, 2025, the Bank’s net non-performing assets (NPA) grew by 1 basis point on a quarterly basis.

* The Gross Non-Performing Asset (NPA) of Retail, Rural, and MSME Book, excluding the Microfinance portfolio, increased from 1.46% on December 31, 2024, to 1.40% on March 31, 2025, while the Net NPA of Retail, Rural, and MSME Book stood at 0.56% on March 31, 2025 (the same as on December 31, 2024).

* As of March 31, 2025, the bank’s PCR was a robust 72.3%.

2. Slippage

* The total slippage for Q4 FY25 was Rs. 2,175 crore, which was Rs. 17 crore less than the Rs. 2,192 crores for Q3 FY25.

* The microfinance business’s gross slippages for Q4 of FY25 were Rs. 572 crore, up from Rs. 437 crore for Q3 of FY25.

* The total slippages for the remainder of the loan book, excluding the microfinance business, increased by Rs. 152 crore on a QoQ basis, from Rs. 1,755 crore in Q3-FY25 to Rs. 1,603 crore in Q4-FY25.

3. SMA Roles:

* From 0.82% as of December 31, 2024, to 0.87% as of March 31, 2025, the SMA-1+2 in the Retail, Rural, and MSME Finance portfolio—which does not include the Microfinance book—rose slightly by 5 basis points on a quarter-over-quarter basis.

* As a result of a decreasing loan book, the Microfinance portfolio’s SMA-1+2 rose from 4.56% on December 31, 2024, to 5.10% on March 31, 2025.

* The SMA-0 pool in the microfinance portfolio decreased by 44.9% on a QoQ basis, while the SMA-1+2 pool decreased by 2.7% on an absolute value basis.

4. Provisions

* Due to increased slippages in the micro-finance book, provisions for FY25 totaled Rs. 5,515 crore, or 2.46% of the loan book.

* In FY25, the credit cost for the Bank’s whole loan book, excluding microfinance and one toll account, was 1.76%. It increased sequentially by 9 basis points, from 1.82% in Q3-FY25 to 1.73% in Q4-FY25.

* The Bank did not prudently use any of the Rs. 315 crore in microfinance provision reserves during the quarter.

* CGFMU provides insurance for the incremental disbursals in microfinance. As of March 31, 2025, 66% of the whole Microfinance portfolio was insured.

E. Financial Gains

* From Rs. 4,469 crore in Q4 FY24 to Rs. 4,907 crore in Q4 FY25, Net Interest Income (NII) increased 9.8% YoY. On a year-over-year basis, NII grew 17.3% in FY25.

* Due in major part to the reduction in the microfinance sector, the Bank’s Net Interest Margin (NIM) on AUM decreased by 9 basis points on a quarterly basis, from 6.04% in Q3-FY25 to 5.95% in Q4-FY25. NIM was 6.09% for FY25 as a whole.

* From Rs. 1,610 crore in Q4 FY24 to Rs. 1,702 crore in Q4 FY25, Fee and Other Income increased by 5.7% YoY. Fee and Other Income grew 15.2% year over year for FY25.

* From Rs. 6,079 crore in Q4 FY24 to Rs. 6,609 crore in Q4 FY25, core operating income increased by 8.7%. Operating income increased 16.7% year over year for FY25.

* From Rs. 4,447 crore in Q4 FY24 to Rs. 4,991 crore in Q4 FY25, operating expenses increased by 12.2% YoY. Operating expenses increased by 16.5% year over year in FY25.

* From Rs. 1,632 crore in Q4 FY24 to Rs. 1,618 crore in Q4 FY25, Core Operating Profit (excluding trading gain) decreased. From Rs. 6,030 crore in FY24 to Rs. 7,069 crore in FY25, it increased 17.2%.

* The core operating profit increased by 19.9% YoY in Q4 FY25 and by 30.6% YoY in FY25, excluding the microfinance business.

* Operating profit, including trading profits, gained 18.9% in FY25 and 8.9% YoY in Q4 FY25.

* The Q4-FY25 net profit was Rs. 304 crore, whereas the Q4-FY24 net profit was Rs. 724 crore. Because of the problems in the microfinance sector, the net profit for the whole year FY25 dropped 48.4% on a year-over-year basis to Rs. 1,525 crore.

F. Position of Capital

Subject to shareholder and regulatory approvals, the Board has approved a new equity capital raise of approximately Rs. 7,500 crore through the issuance of Compulsorily Convertible Preference Shares (CCPS) to Platinum Invictus B 2025 RSC Limited, a wholly owned subsidiary of the Abu Dhabi Investment Authority’s (ADIA) private equity division, and Currant Sea Investments B.V., an affiliate of Warburg Pincus LLC.

* A dividend of Rs. 0.25 per share has been authorized by the Board (pending shareholder approval).

* Based on March 31, 2025 figures, the CRAR would be 18.20% and Tier-I would be 15.89% after conversion and the proposed dividend.

Remarks from the CEO and Managing Director

“Our customer deposits grew well at 25% YoY, and the CASA ratio continues to remain strong at 46.9%, reflecting the strength of our deposit franchise,” said V Vaidyanathan, Managing Director and CEO of IDFC FIRST Bank. Our book of financed assets increased by 20.4%. With GNPA and NNPA at 1.87% and 0.53%, respectively, the Bank’s asset quality is still strong.

Additionally, a Warburg Pincus LLC affiliate and a fully owned subsidiary of the Abu Dhabi Investment Authority’s (ADIA) private equity division have agreed to invest approximately Rs. 7,500 Cr in the Bank (pending shareholder and regulatory approvals). This will help us achieve our next growth phase and improve our Capital Adequacy Ratio.

We are dedicated to expanding responsibly, providing top-notch goods and services, taking the lead in innovation, and creating customer-focused offerings.”