IDFC First Bank Q2 Results: Net Profit Jumps 76% YoY on Strong Loan Growth, CASA Ratio Hits 50%, NIM At 5.59%

Today, IDFC FIRST Bank released a solid set of financial results for the quarter that ended on September 30, 2025, showing steady growth in all of the key metrics. Due to a change in the funding mix and rate dynamics, the Net Interest Margin (NIM) dropped 59 basis points YoY to 5.59% in Q2 FY26.

While net profit came in at Rs 352 crore, a 75.6% YoY jump but down 23.8% QoQ due to lower trade gains compared to the previous quarter, core operating profit was Rs 1,825 crore, which remained relatively unchanged sequentially. Despite a 202 bps YoY fall, the capital adequacy ratio, which was 14.34%, maintained a sufficient buffer.

The bank's total consumer base increased 21.6% (YoY) to Rs 5,35,673 crore, mostly due to strong growth in deposits and loans. Loans and advances rose 5.3% sequentially and 19.7% year on year to Rs 2,66,579 crore, while asset quality improved further, with net non-performing assets (NPA) falling to 0.52% and gross non-performing assets (NPA) falling to 1.86%.

A drop to 0.90% in the SMA 1 & 2 (Retail, Rural, and MSME) ratio indicated enhanced loan performance. In terms of liabilities, CASA deposits increased 26.8% to Rs 1,38,583 crore, while customer deposits jumped 23.4% YoY to Rs 2,69,094 crore. A stronger deposit franchise is shown by the CASA ratio, which increased 119 basis points YoY to 50.07%.

Indicators of the bank's asset quality, including gross non-performing assets (NPA), net non-performing assets (NPA), SMA, and book provisions, have remained steady.

Commenting on the results, Mr. V Vaidyanathan, MD and CEO said "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. On cost of funds, we expect it to drop from here on. The bank is witnessing improving operating leverage. For instance, in FY25, total Business, i.e. loans and customer deposits, grew by 22.7% YoY, against increase in Opex of 16.5% YoY. Following on, in H1 FY26, total Business grew by 21.6% YoY, against Opex increase of 11.8% YoY. We hope to sustain this trend."

Overall, despite a slight sequential slowdown in profitability, IDFC FIRST Bank maintained a high CASA profile, enhanced asset quality, and consistently drove business volumes.