IDFC First Bank Q2 Net Profit Jumps to Rs 1,049 Crore on Strong Loan Growth

IDFC First Bank reported a consolidated net profit of ₹1,049.17 crore for the quarter ending September 30, 2026, marking a substantial increase from the ₹347.80 crore recorded in the same period of the previous year, according to financial reports. Crisp reported that profit after tax stood at ₹1,045 crore, representing a 196.5% surge year-on-year, though dipping 2.8% sequentially. Total income grew to ₹14,228.46 crore, compared with ₹11,828.41 crore in the corresponding period of the previous year. Net interest income climbed 21.0% year-on-year to reach ₹6,184 crore, while core operating profit grew 38.5% to ₹2,527 crore. Provisions declined by 21.7% year-on-year to ₹1,137 crore.

The acceleration in lending formed a central pillar of the quarterly performance. Core domestic loans increased 20.4% year-on-year to ₹313,864 crore by the end of September 2026, which also represented growth of about 5.4% from the June quarter. On a broader scale, gross advances reached ₹338,749 crore, reflecting a 29.9% year-on-year increase and 13.7% sequential growth. This wider metric incorporates FCNR(B)-related lending booked through the International Banking Unit. During the quarter, the bank mobilised ₹34,390 crore of FCNR(B) deposits, with the International Banking Unit extending ₹24,885 crore of leverage to non-resident Indian customers.

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Management stated that FCNR(B)-backed funding is accretive to net interest income, profit after tax, return on equity, and earnings per share, though it is optically dilutive to margins. The company stated it mobilised about US$ 3.6 billion of FCNR(B) deposits, debuted with a US$ 950 million bond and BBB- global ratings, and calibrated deposit growth. The strong foreign currency inflows generated surplus liquidity, prompting the bank to calibrate deposit growth and reduce expensive bulk term deposits. Bulk rupee term deposits of ₹3 crore and above declined to 13.9% of total deposits as of September 30, down from 17.1% at June 30 and 18.2% a year earlier. The average liquidity coverage ratio rose to 125% in Q2 FY27, compared with 116% in the previous quarter. Management also stated its specialization in cash flow evaluation and digital capabilities plus market opportunity provides a long runway for RAM growth over the next decade.

Deposit metrics showed healthy expansion alongside lending figures. Core total deposits rose 17.0% year-on-year to ₹323,697 crore, with quarterly growth of approximately 3.8%. Customer deposits, excluding certificates of deposit, increased 17.6% year-on-year to ₹316,529 crore. Including FCNR(B) balances on the International Banking Unit balance sheet, total deposits reached ₹348,582 crore, up 25.9% year-on-year. The current and savings account ratio improved to 51.3%, up from 50.8% in the previous quarter and 50.1% a year earlier.

Asset quality metrics registered firm improvements across the board. The gross non-performing asset ratio improved to 1.32% from 1.86% a year earlier, while the net non-performing asset ratio decreased from 0.52% to 0.40%. Management noted that the bank continues to hold a ₹515 crore contingency provision.

The sector performance shared common themes with peer institutions during the same reporting cycle. Kotak Mahindra Bank reported a 29.5% year-on-year jump in net profit to ₹4,212 crore in the September quarter of FY27, up from ₹3,253.3 crore a year earlier, according to an exchange filing. Kotak Mahindra Bank's net interest income rose 15.7% to ₹8,459 crore, net advances increased 25% year-on-year to ₹5,77,295 crore as of September 30, 2026, and gross non-performing assets moderated to 1.04%.

The board of IDFC First Bank scheduled its meeting to consider and approve the unaudited standalone and consolidated financial results for the quarter and half-year ended September 30, 2026, on Saturday, October 24. Investors will continue tracking net interest margins, loan growth sustainability, funding costs, and asset deployment strategies in subsequent quarters.