IDFC Bank Q4FY25 net profit dips 58% on microfinance hit

Mumbai: IDFC First Bank’s net profit fell 58% year-on-year to Rs 304 crore for the quarter ended March 2025, weighed down by higher provisions on its microfinance portfolio.
Total provisions and contingencies doubled to Rs 1,450 crore from Rs 722 crore a year earlier. The gross slippages for microfinance business increased from Rs. 437 crore in Q3-FY25 to Rs.572 crore in Q4-FY25; slippages excluding microfinance business was lower by ~Rs. 150 crore on a quarter on quarter basis. The bank continues to de-grow its Microfinance portfolio, which as % of overall loan book reduced from 6.6% in March-2024 to 4.0% in Mar-2025.
Despite the earnings hit, the bank reported healthy growth in deposits and lending. Customer deposits rose 25.2% to Rs 2,42,543 crore, led by a 26.4% increase in retail deposits and a 24.8% rise in CASA deposits. The total loan book expanded 20.4% to Rs 2,41,926 crore, with the retail, rural, and MSME segment growing 18.6% to Rs 1,97,568 crore.
Net interest income rose 9.8% to Rs 4,907 crore, as total interest income grew 14.5% to Rs 9,413 crore, outpacing a 20.1% rise in interest expenses. Other income increased by 15.4%, pushing total income up 14.7% year-on-year to Rs 11,308 crore. Operating expenses climbed 12.2%, driven by higher employee and other costs, resulting in an 8.9% rise in operating profit to Rs 1,812 crore.
Asset quality remained largely stable: gross non-performing assets rose in value but the gross NPA ratio edged down to 1.87%, while the net NPA ratio improved to 0.53%. Return on assets declined sharply to 0.36%, reflecting the strain from higher provisioning. Nevertheless, net worth rose 19.7% to Rs 37,140 crore and the debt-equity ratio improved to 0.30. Earnings per share fell in tandem, with basic EPS at Rs 0.42 and diluted EPS at Rs 0.41.