Highlights on IDFC First Bank Q4 Results 2025
- Net Profit Decline: IDFC First Bank’s Q4 FY25 net profit fell 58% YoY to ₹304 crore from ₹724 crore.
- Dividend Proposal: The board recommended a ₹0.25 per share dividend, subject to AGM approval.
- NII Growth: Net interest income rose 9.8% YoY to ₹4,907 crore, despite margin pressure.
- Asset Quality: Gross NPA improved to 1.87%, while provisions surged to ₹1,450 crore.
- Deposit Growth: Customer deposits grew 25.2% YoY, with a strong CASA ratio of 46.9%.
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Join Telegram channelIDFC First Bank Q4 Results 2025: 58% Profit Drop, ₹0.25 Dividend Proposed
Introduction
IDFC First Bank, a leading private-sector lender in India, released its Q4 FY25 financial results on April 26, 2025, sparking significant interest among investors and analysts. The bank, formed by the 2018 merger of IDFC Bank and Capital First, has been navigating a challenging financial landscape marked by asset quality concerns and rising provisions, particularly in its microfinance portfolio.
While the IDFC First Bank Q4 results reflect a steep 58% YoY decline in net profit to ₹304 crore, the bank’s robust deposit growth, improved asset quality, and proposed IDFC First Bank dividend 2025 of ₹0.25 per share signal resilience and strategic focus. This article provides a comprehensive analysis of the bank’s Q4 performance, key financial metrics, market reactions, and future outlook, optimized for readers seeking actionable insights.
IDFC First Bank Q4 Results: Key Financial Performance
Net Profit Takes a Hit
IDFC First Bank’s standalone net profit for the January-March 2025 quarter plummeted 58% YoY to ₹304 crore, compared to ₹724 crore in Q4 FY24. The sharp decline was primarily attributed to elevated provisions, which rose 100% YoY to ₹1,450 crore, driven by stress in the microfinance (MFI) segment.
Analysts had anticipated a profit drop, with estimates ranging from ₹288 crore to ₹389 crore, but the actual figure fell below the CNBC-TV18 poll expectation of ₹359.6 crore. For the full fiscal year FY25, the bank’s net profit declined 48.4% YoY to ₹1,525 crore, largely due to MFI-related challenges.
Dividend Proposal for FY25
In a move to maintain shareholder confidence, the bank’s board proposed a final IDFC First Bank dividend 2025 of ₹0.25 per equity share (2.50% of the face value of ₹10), subject to approval at the upcoming AGM. This translates to a dividend payout of approximately ₹187 crore, based on the bank’s issued share capital.
The announcement reflects the bank’s commitment to rewarding investors despite profitability pressures, contrasting with FY24 when no dividend was declared.
Net Interest Income and Margin
The bank’s net interest income (NII), a key indicator of core banking performance, grew 9.8% YoY to ₹4,907 crore in Q4 FY25, up from ₹4,469 crore in Q4 FY24. However, this fell short of analyst expectations of ₹5,080.2 crore. For the full year, NII rose 17.3% YoY to ₹18,565 crore.
The net interest margin (NIM) contracted by 9 basis points quarter-on-quarter (QoQ) to 5.95% from 6.04% in Q3 FY25, primarily due to interest reversals and a decline in the microfinance business. Despite the compression, the NIM remains competitive within the industry.
Asset Quality: A Mixed Picture
IDFC First Bank reported a marginal improvement in asset quality, with the gross non-performing asset (GNPA) ratio declining to 1.87% in Q4 FY25 from 1.94% in Q3 FY25. The net NPA (NNPA) ratio remained nearly stable at 0.53%, up slightly from 0.52% QoQ.
Excluding the microfinance portfolio, the GNPA for retail, rural, and MSME segments improved to 1.40% from 1.46% QoQ, reflecting effective credit risk management in non-MFI segments. The provision coverage ratio (PCR) stood at a healthy 72.3%, providing a buffer against potential loan defaults. However, the special mention account (SMA-1+2) ratio in the microfinance portfolio rose to 5.10% from 4.56% QoQ, signaling ongoing stress.
Provisions Surge
Provisions and contingencies for Q4 FY25 surged to ₹1,450 crore, up 100% YoY from ₹722 crore in Q4 FY24 and 9% QoQ from ₹1,338 crore in Q3 FY25. For FY25, total provisions reached ₹5,515 crore, equivalent to 2.46% of the loan book, driven by higher slippages in the microfinance segment.
Excluding MFI and a specific toll account, the credit cost for the overall loan book was 1.73% in Q4 FY25, an improvement from 1.82% in Q3 FY25. The bank’s prudent provisioning strategy aims to mitigate risks but has significantly impacted profitability.
Business Growth: Deposits and Loans
IDFC First Bank demonstrated robust growth in its core operations:
- Customer Deposits: Total customer deposits surged 25.2% YoY to ₹242,543 crore in Q4 FY25 from ₹193,753 crore in Q4 FY24. Retail deposits grew 26.4% YoY to ₹191,268 crore, while the CASA (Current Account Savings Account) ratio remained strong at 46.9%, slightly down from 47.2% in Q4 FY24.
- Loans and Advances: The funded asset book grew 20.4% YoY to ₹241,000 crore, with sequential growth of 4.7% QoQ. The credit-deposit ratio improved to 99.4%, reflecting balanced growth.
These metrics underscore the bank’s strong deposit franchise and lending capabilities, positioning it well for future expansion.
Table: IDFC First Bank Q4 FY25 Financial Snapshot
| Metric | Q4 FY25 | Q4 FY24 | YoY Change | Q3 FY25 | QoQ Change |
|---|---|---|---|---|---|
| Net Profit (₹ Cr) | 304 | 724 | -58% | 339 | -10% |
| Net Interest Income (₹ Cr) | 4,907 | 4,469 | +9.8% | 4,902 | +0.1% |
| Net Interest Margin (%) | 5.95 | 6.36 | -41 bps | 6.04 | -9 bps |
| Gross NPA (%) | 1.87 | 1.88 | -1 bp | 1.94 | -7 bps |
| Net NPA (%) | 0.53 | 0.60 | -7 bps | 0.52 | +1 bp |
| Provisions (₹ Cr) | 1,450 | 722 | +100% | 1,338 | +8.4% |
| Customer Deposits (₹ Cr) | 242,543 | 193,753 | +25.2% | Rú 4,907 | +9.8% |
| CASA Ratio (%) | 46.9 | 47.2 | -0.3% | 48.0 | -1.1% |
| Dividend per Share (₹) | 0.25 (Proposed) | – | – | – | – |
Source: IDFC First Bank Q4 FY25 Results, Livemint, ET Now
Market Reaction and Share Price Movement
Ahead of the IDFC First Bank Q4 results announcement, the bank’s share price closed 2.19% lower at ₹66.15 on April 25, 2025, reflecting investor caution amid expectations of a profit decline. Post-results, the stock experienced volatility, trading at ₹66.08 (-2.32%) on April 26, 2025, as reported on the NSE.
The 52-week range of ₹52.46 to ₹86.10 highlights the stock’s volatility, driven by mixed financial performance and market sentiment. Analyst ratings remain cautious, with Motilal Oswal assigning a ‘Neutral’ rating and a target price of ₹58, citing persistent MFI challenges. However, the bank’s capital raise of ₹7,500 crore from Warburg Pincus and ADIA has fueled optimism for long-term growth.
Management Commentary and Strategic Outlook
V Vaidyanathan, Managing Director and CEO of IDFC First Bank, emphasized the bank’s resilient performance despite MFI headwinds. “Our customer deposits grew well at 25% YoY, and the CASA ratio remains strong at 46.9%. Asset quality is stable, with GNPA and NNPA at 1.87% and 0.53%, respectively.
The recent ₹7,500 crore capital infusion will strengthen our capital adequacy ratio and support our next phase of growth,” he said. The bank is closely monitoring its microfinance portfolio and expects recovery in H2 FY26, supported by strategic investments in digital banking and branch expansion.
Challenges and Opportunities
Challenges
- Microfinance Stress: Rising delinquencies in the MFI segment have driven higher provisions and impacted profitability. The SMA-1+2 ratio in MFI loans rose to 5.10%, signaling potential risks.
- Margin Pressure: The decline in NIM to 5.95% reflects challenges in balancing lending yields and funding costs, particularly in the MFI portfolio.
- Profitability Recovery: Sustained high provisions could delay a return to pre-FY25 profit levels.
Opportunities
- Strong Deposit Franchise: The 25.2% YoY deposit growth and 46.9% CASA ratio provide a low-cost funding base for lending expansion.
- Capital Infusion: The ₹7,500 crore investment from global players enhances the bank’s capital adequacy ratio (15.48% in Q4 FY25) and supports growth initiatives.
- Digital Banking: IDFC First Bank’s focus on customer-centric digital solutions positions it to capture a larger market share in retail banking.
What’s Next for IDFC First Bank?
The IDFC First Bank Q4 results underscore a challenging yet promising phase for the bank. While the 58% profit decline and MFI-related provisions have dented short-term performance, the bank’s robust deposit growth, improving asset quality, and proposed dividend signal long-term potential.
Investors will closely watch the AGM for dividend approval and management’s commentary on MFI recovery and NIM stabilization. With a strong capital base and digital banking prowess, IDFC First Bank is poised to navigate industry challenges and deliver sustainable growth in FY26 and beyond.
FAQs About IDFC First Bank Q4 Results
1. What were the key highlights of IDFC First Bank Q4 results for FY25?
IDFC First Bank’s Q4 FY25 net profit fell 58% YoY to ₹304 crore due to high provisions, while NII grew 9.8% to ₹4,907 crore. The bank proposed a ₹0.25 per share dividend, and the GNPA ratio improved to 1.87%.
2. Has IDFC First Bank announced a dividend for 2025?
Yes, the board proposed a IDFC First Bank dividend 2025 of ₹0.25 per share for FY25, pending shareholder approval at the upcoming AGM. This marks a return to dividend payouts after no dividends in FY24.
3. Why did IDFC First Bank’s net profit decline in Q4 FY25?
The 58% YoY profit decline to ₹304 crore was driven by a 100% YoY increase in provisions to ₹1,450 crore, primarily due to stress in the microfinance portfolio and asset quality challenges.
4. How did IDFC First Bank’s asset quality perform in Q4 FY25?
The bank’s GNPA ratio improved to 1.87% from 1.94% QoQ, and the NNPA ratio was stable at 0.53%. Excluding the microfinance segment, GNPA for retail and MSME loans was 1.40%, reflecting effective risk management.
Conclusion
IDFC First Bank’s Q4 FY25 results reflect a complex interplay of challenges and strengths. The 58% profit decline, driven by microfinance-related provisions, has raised concerns, but the bank’s strong deposit growth, improving asset quality, and proposed IDFC First Bank dividend 2025 of ₹0.25 per share demonstrate resilience.
With a robust capital base and strategic focus on digital banking, the bank is well-positioned to overcome short-term hurdles and drive long-term value for shareholders. Investors should monitor the AGM and MFI recovery updates to gauge the bank’s trajectory in FY26. Stay tuned for more updates on IDFC First Bank’s financial journey!
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