IDFC First Bank Q2 Review - Earnings Catch Up As Credit Cost Subsidies: ICICI Securities
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ICICI Securities Report
IDFC FIRST Bank Ltd.'s Q2 FY22 earnings beat was led by a superior NIM trajectory (improved 25 basis points to 5.76%), retail asset growth of 7% quarter-on-quarter, and containment of credit cost at 160 basis points.
This was offset by higher opex (pushing cost-to-income ratio higher) and lower support of treasury.
Forward flows from early-dpd buckets resulted in elevated slippages, though recoveries and aggressive write-offs reduced GNPA quarter-on-quarter.
Credit costs were lower due to buffer utilisation (of 50 basis points) and recoveries in write-offs.
Drawing comfort from gradual and consistent improvement in cheque bounce trends, collection efficiency, customer credit profile, etc., IDFCFB expects <2.5% credit cost in FY22.
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