Private sector lender IDFC First Bank posted a ₹617 crore loss for the April-June quarter due to its exposure in two NBFCs downgraded by rating agencies recently.
“The bank reported a net loss of ₹617 crore for the quarter ended June 30, 2019, primarily due to additional provisioning for two identified stressed corporate loans to a housing finance company and a financial services company [recently downgraded by credit rating agencies], taking the provision coverage on these accounts to 75%,” IDFC Bank said in a statement, without naming the companies.
The bank said that the provisions on these accounts was adequate and it did not expect to take any more provisions on this account in the near future.
The gross NPA ratio increased to 2.66% as compared to 2.43% during the same period of the previous year.
IDFC Bank had merged with Capital First, a retail-focussed NBFC in December last year to become IDFC First Bank.
“The net interest margin for the bank pre-merger was 1.56% which has now crossed 3.01% in Q1-FY20, within six months of the merger. The increase in NIM is sustainable as the mix of the loan book is changing towards retail,” the bank said.
The lender further said it has gained strong momentum in raising current and savings account (CASA) Deposits. As on June 30, 2019, CASA Deposits were at ₹9,987 crore as compared to ₹6,083 crore as on June 30, 2018, representing a growth of 64%.
The CASA deposits’ share in total deposits increased from 10.37% on December 31, 2018, at merger, to 15.08% as of June 30, 2019, the bank said.
Retail loans as percentage of total loans increased to 40% as of June 30, 2019, from 11% as on June 30, 2018.
