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IDFC First Bank in Q4 FY20 posted a net profit of Rs.72 Cr on account of a robust growth across Net Interest Income, Non-Interest Income, CASA deposits and Retail Loan Book. Also, there was a decline in provisions QoQ by almost 70%, due to which Bank’s Net Profit has come into the positive territory for the first time since the merger.
IDFC
First Bank (after the merger of Erstwhile Capital First with IDFC Bank) is engaged
in the business of Banking Services, thus offering a range of financial
solutions to individuals, small businesses and corporates.
This
video offers IDFC First Bank Stock Analysis, with a detailed analysis of the
company’s quarterly results and also the wholesale & retail loan mix of the
bank. It further highlights IDFC First Bank financials, including Gross &
Net NPA, Net Interest Margin (NIM), CASA Ratio. Capital Adequacy ratio, etc.
Moreover, the figures of Loans under Moratorium are also discussed, which
appears to be higher than the industry average. This can be a point of concern
for retail investors invested in IDFC First Bank stock.
IDFC
First Bank in Q4 FY20 posted a net profit of Rs.72
Cr on account of robust growth
across Net Interest Income, Non-Interest Income, CASA deposits and Retail Loan
Book. Also, there was a decline in provisions of QoQ by almost 70%, due to
which Bank’s Net Profit has come into the positive territory for the first time
since the merger.
The
video also highlights IDFC First Bank financial results, including interest
income, interest expense, operating income & expenses, etc. The users can
also get figures of IDFC First Bank balance sheet size.
IDFC
First Bank Q4 FY20 Results: IDFC First Bank Quarterly Results
Net
Interest Income (NII)
●
NII is a critical parameter for analysing the
core business growth of the bank.
●
Net Interest Income = (Interest Income –
Interest Expenses)
●
Interest Expenses are nothing but the financial
cost incurred by the bank while raising funds which are going to be available
for the lending.
●
Net
Interest Income is increased by 40% YoY driven by:
○
Robust YoY growth in CASA deposits (162%) and
Retail Term Deposits (107%)
○
Decline in Interest Expenses by 5% YoY due to
a 6% fall in total borrowings
○ Improved
Net Interest Margin QoQ as well as YoY
Pre-provisioning
Operating Profit (PPOP): IDFC First Bank Fundamentals
●
Operating Profit before making provisions is
called as Pre-provisioning Operating Profit (PPOP)
●
PPOP = (Total Operating Income – Operating
Expenses)
●
Pre-provisioning
Operating Profit is increased by almost 70% YoY (Excluding Trading Gains) on
account of:
○
Robust growth in NII by 40% & Operating
Income by 67% YoY
○ Fall in
Interest Expenses by 5% YoY
Net
Profit: IDFC First Bank Fundamental Analysis
●
In Q4 FY20, the bank made total provisions of
Rs.679 Cr up 4% YoY, out of which COVID-Related provisions were Rs.225 Cr.
●
Profit Before Tax (PBT) in Q4 FY20 was at
Rs.107 Cr from a loss of Rs.417 Cr last year in the same quarter.
○
IDFC First Bank’s financial performance has
come into the positive territory for the first time in Q4 FY20 after the IDFC Bank and Capital First merger last
year in Q3 FY19.
○ It is a
very positive sign for the bank that it is successfully consolidating its
balance sheet and building a Retail-oriented Business Model under the visionary
leadership of Mr V. Vaidyanathan, MD & CEO IDFC First Bank.
●
Net Profit for Q4 FY20 stood at Rs.72 Cr
from a loss of Rs.218 Cr in Q4 FY19. Thus, Q4 FY20 is a quarter delivering a Loss to Profit YoY.
The
investors can check out the financial statements & quarterly results of the
company, along with IDFC First Bank share price, on the stock-o-meter feature of our website.
Despite the evident losses, it can be incurred that the company
has strong management. Thus, it is expected that the situation will improve.
Through the video, it can be observed that IDFC Bank share can be suitable for
aggressive investors, depending upon the risk profile etc. IDFC first bank
offers fair valuations, but the risk is high.
Thus, with this IDFC First bank research report, the investors
will be able to make a viable investment decision.
To get deeper insights into IDFC First Bank Analysis, check out
other resources available on our website. Get a detailed IDFC First Bank stock
review, with our stock articles on Q1 FY21, Q2 FY20 & Q3 FY20 Result Analysis. You can also
check out our e-book on IDFC First Bank Ltd - Company Analysis &
get an in-depth IDFC First Bank share analysis.
Make all your investment decisions with us, as we offer quality
financial advice. For more of such quality content, check out Invest Yadnya.
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