ICICI Direct: IDFC First Bank Walking On Right Path Despite Challenging Environment
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ICICI Direct Report
IDFC First Bank Ltd. delivered a strong performance despite a challenging environment. Except moratorium in phase 2 still high at 28%, the bank recorded an improvement on all parameters.
The bank offered moratorium 2 to 28% of its customers by value versus 35% in moratorium 1. Around 23% is in retail assets including rural portfolio and 35% is in the wholesale financing portfolio.
Provision was at Rs 764 crore, including Rs 375 crore related to Covid-19 over and above Rs 225 crore done in Q4 FY21.
Asset quality witnessed a strong sequential improvement with gross non-performing asset (GNPA) and net non-performing asset (NNPA) ratio improving approximately 61 basis points and approximately 43 basis points to 1.99% and 0.51%, respectively.
Gross NPA of the retail loan book was at 0.87% versus 1.77% as of March 31, 2020 and net NPA percentage of the retail loan book of the bank was at 0.24% vs. 0.67% as of March 31, 2020.
Moratorium helped NPA ratio improvement. Provision coverage ration has been improving in the last five quarters and has reached 74.93% from 64.53% in Q4 FY20.
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