IDFC FIRST Bank has reported its financial results for the quarter ending September 30, 2025, showcasing robust growth across key metrics. The bank’s net profit reached Rs 352 crore, marking a 75.6% increase year-on-year, although it fell by 23.8% compared to the previous quarter due to reduced trade gains. Core operating profit remained stable at Rs 1,825 crore.

Loans and advances saw significant growth, climbing 5.3% sequentially and 19.7% year-on-year to Rs 2,66,579 crore. This growth contributed to an improved asset quality, with net non-performing assets (NPA) decreasing to 0.52% and gross NPA reducing to 1.86%. The SMA 1 & 2 ratio for Retail, Rural, and MSME sectors also fell to 0.90%, indicating better loan performance.

The Net Interest Margin (NIM) experienced a decline of 59 basis points year-on-year, settling at 5.59% in Q2 FY26. Despite this drop, the capital adequacy ratio stood at a comfortable 14.34%, providing a sufficient buffer even with a year-on-year decrease of 202 basis points.

Customer deposits showed strong growth, increasing by 23.4% year-on-year to Rs 2,69,094 crore. CASA deposits rose by 26.8%, reaching Rs 1,38,583 crore. The CASA ratio improved by 119 basis points year-on-year to 50.07%, reflecting a stronger deposit franchise.

Mr V Vaidyanathan, MD and CEO of IDFC FIRST Bank, commented on the results: “The stress in the MFI business was an MFI industry issue and looks like it is behind us. Other than MFI, the asset quality of the Bank has always been stable for over a decade through cycles and continues to be so with Gross NPA at 1.86% and Net NPA at 0.52% as of 30th September 2025.”

The bank’s total consumer base expanded by 21.6% year-on-year to Rs 5,35,673 crore, driven largely by growth in deposits and loans. This expansion underscores the bank’s ability to maintain high asset quality indicators such as gross NPA, net NPA, SMA ratios, and book provisions.

Operating Leverage and Future Outlook

Mr Vaidyanathan also highlighted improvements in operating leverage: “On cost of funds, we expect it to drop from here on. The bank is witnessing improving operating leverage.” He noted that in FY25, total business grew by 22.7% year-on-year against an Opex increase of 16.5%. In H1 FY26, business grew by 21.6% while Opex rose by only 11.8%.

Overall, IDFC FIRST Bank has maintained a strong CASA profile and enhanced asset quality despite a slight sequential dip in profitability. The bank continues to drive business volumes consistently while expecting further improvements in cost efficiency.