Mumbai: IDFC FIRST Bank has reported its highest-ever quarterly profit, posting a Profit After Tax (PAT) of ₹1,075 crore for the quarter ended June 30, 2026, marking a 132.4% year-on-year increase from ₹463 crore in the corresponding quarter of the previous financial year.
The strong performance was underpinned by sustained growth in lending, healthy deposit mobilisation, improved asset quality and stronger profitability, reflecting the bank’s continued focus on building a high-quality and well-governed franchise.
The bank’s total customer business, comprising loans and customer deposits, rose 18.6% year-on-year to ₹6,04,776 crore, while increasing 5.2% sequentially during the quarter.
Lending momentum remains strong
Loans and advances, including credit substitutes, grew 20.6% year-on-year to ₹3,05,370 crore, with a 5.2% quarter-on-quarter increase. Growth was led by mortgages, vehicle finance, corporate lending and consumer loans.
The Retail, Agriculture and MSME (RAM) portfolio expanded 18.2% year-on-year to ₹2,41,118 crore, while the wholesale loan portfolio recorded an even stronger 30.4% annual growth, reaching ₹64,252 crore.
Asset quality continues to improve
The bank reported further improvement in asset quality during the quarter.
Its Gross Non-Performing Asset (GNPA) ratio declined to 1.51%, compared with 1.97% a year earlier, while the Net NPA ratio improved to 0.44% from 0.55%.
Within the RAM portfolio, the Gross NPA ratio reduced to 1.40%, while the Net NPA ratio fell to 0.52%. Early stress indicators also remained stable, with SMA-1 and SMA-2 for the RAM portfolio at 0.77%.
Deposits and CASA strengthen further
Customer deposits increased 16.6% year-on-year to ₹2,99,405 crore, while CASA deposits registered a stronger 24.6% annual growth, reaching ₹1,58,492 crore.
The bank’s CASA ratio improved to 50.8%, compared with 48.0% a year earlier, reflecting a growing share of low-cost deposits. The cost of funds also declined to 5.96%, improving by 46 basis points year-on-year.
Profitability improves across key metrics
The bank’s Net Interest Margin (NIM) rose to 5.96%, up from 5.71% in the corresponding quarter last year.
Operational efficiency also improved, with the cost-to-income ratio (excluding trading gains) reducing to 70.7%, compared with 73.8% a year ago.
Loan provisioning declined significantly, with provisions as a percentage of average loans falling to 1.53%, reflecting improving credit quality.
During the quarter, the bank received a ₹514.8 crore claim under the Credit Guarantee Fund for Micro Units (CGFMU) scheme. At the same time, it made an additional precautionary provision of ₹515 crore to strengthen its balance sheet against potential macroeconomic and geopolitical uncertainties.
The bank reported a Return on Assets (RoA) of 1.06%, compared with 0.54% in the first quarter of FY2026, while maintaining a Capital Adequacy Ratio of 15.05%, including a CET-1 ratio of 13.33%.
Commenting on the results, V. Vaidyanathan, Managing Director and Chief Executive Officer, said the bank remains focused on building a high-quality institution anchored in strong corporate governance. He noted that business momentum has remained healthy, asset quality continues to improve and credit costs are steadily declining.
He added that the CGFMU claim received during the quarter was offset by an equivalent precautionary provision to safeguard the bank against potential uncertainties such as monsoon variability, fuel price fluctuations and global geopolitical risks. Vaidyanathan said the investments made over recent years to strengthen the bank are now translating into improved financial performance, with record quarterly profitability and the bank’s Return on Assets crossing the 1% mark for the first time.
