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8h ago

IDFC First Bank Q2 Profit Up 76% As MFI Stress Eases, Margins Stay Soft

The bank trimmed microfinance exposure with lower provisioning, pointing to a potential capital lift from the planned CCPS conversion.

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IDFC FIRST Bank Q2 FY26 PAT at Rs. 352 Crore, PAT up 76% YoY
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Overview

  • Profit after tax rose to Rs 352 crore in Q2 FY26, a 76% year-on-year increase driven by stronger core operations despite weaker trading gains versus Q1.
  • Net interest margin stood at 5.60%, down 11 bps sequentially and 58 bps year-on-year, with Yes Securities expecting a recovery toward about 5.8% by Q4.
  • Provisions fell 12.5% quarter-on-quarter to Rs 1,452 crore as microfinance provisioning eased; the bank used Rs 75 crore from its MFI buffer and retains Rs 240 crore.
  • The MFI portfolio shrank 41.6% year-on-year to 2.7% of funded assets as gross slippages moderated to Rs 22.6 billion for the quarter, implying a 3.6% annualized slippage ratio.
  • Asset quality metrics remained stable at 1.86% gross NPA and 0.52% net NPA; funded assets grew 5.3% QoQ with deposits up 4.5% QoQ, credit cards reached 4.0 million, and CCPS conversion would lift CAR to 16.82% and Tier I to 14.75%.