IDFC FIRST BANK 2023-24 Annual Report Analysis

Thu, 8 Aug

IDFC FIRST BANK has announced its results for the year ended March 2024. Let us have a look at the detailed performance review of the bank during the year 2023-24.

IDFC FIRST BANK Income Statement Analysis

• Interest income during the year rose 33.4% on a year-on-year (YoY) basis.
• Interest expenses were up by 37.5% YoY during the same period.
• Operating expenses increased by 33.4% YoY during the year.
• The bank's net interest income (NII) increased by 30.2% YoY during the fiscal. Consequently, net interest margins (NIM) witnessed a growth and stood at 6.1% in FY24 as against 5.9% in FY23.
• Other income increased by 32.8% YoY during the year.
• Net profit for the year increased by 18.4% YoY.
• Net profit margins during the year declined to 9.7% in FY24 from 10.9% in FY23.

IDFC FIRST BANK Income Statement – 2023-24

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*	% Change
Interest Income	Rs m	227,278	303,251	33.4%
Other Income	Rs m	44,673	59,317	32.8%
Interest Expense	Rs m	100,906	138,703	37.5%
Net Interest Income	Rs m	126,372	164,548	30.2%
Operating Expense	Rs m	121,082	161,477	33.4%
Pre-provision Operating Profit	Rs m	49,962	62,388	24.9%
Provisions & Contingencies	Rs m	25,113	32,965	31.3%
Profit before tax	Rs m	33,314	38,572	15.8%
Tax	Rs m	8,465	9,148	8.1%
Profit after tax	Rs m	24,849	29,424	18.4%
Minority Interest	Rs m	0	0	0.0%
Net Interest Margin	%	5.9	6.1
Net profit margin	%	10.9	9.7

Must See: These Segments are Witnessing Incredible Growth with Modi's Push

IDFC FIRST BANK Balance Sheet Analysis

• The bank's deposits during FY24 stood at Rs 2,005.7 bn as compared to Rs 1,444.7 bn in FY23, thereby witnessing an increase of 38.8%.
• Advances for the year stood at Rs 1,945.9 bn as compared to Rs 1,517.9 bn during FY23, a rise of 28.2%.
• Cost of deposits for IDFC FIRST BANK rose 17.5% and stood at 5.1%, while yield on advances rose to 13.3%.
• The lender's investments rose to Rs 745.0 bn during the year from Rs 609.1 bn in FY23.
• Borrowing stood at Rs 509.4 bn, a fall of 11.0% as compared to previous year.
• Overall, the total assets and liabilities for FY24 stood at Rs 2,962.1 bn as against Rs 2,398.8 bn during FY23, thereby witnessing a rise of 23.5%.

IDFC FIRST BANK Balance Sheet – as on March 2024

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*	% Change
Networth	Rs m	258,104	322,147	24.8%
Advances	Rs m	1,517,945	1,945,924	28.2%
Deposits	Rs m	1,444,695	2,005,702	38.8%
Yield on advances	%	12.6	13.3
Cost of Deposits	%	4.3	5.1
Investments	Rs m	609,133	745,001	22.3%
Borrowings	Rs m	572,121	509,357	-11.0%
Total Assets	Rs m	2,398,821	2,962,098	23.5%

Current Valuations for IDFC FIRST BANK

• The trailing twelve-month earnings per share (EPS) of the bank stands at Rs 4.2, an improvement from the EPS of Rs 3.8 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 72.8, stands at 18.5 times its trailing twelve months earnings.
• The price to adjusted book value (P/ABV) ratio at current price levels stands at 1.7 times, while the price to income ratio stands at 1.8 times.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*
Income per share (Unadj.)	Rs	34.3	42.9
Earnings per share (Unadj.)	Rs	3.8	4.2
Diluted earnings per share	Rs	3.3	3.9
Avg P/E ratio	Rs	12.4	18.5
Avg P/ABV ratio	Rs	2.5	1.7
Avg Market Cap	Rs	308,570	544,702
Dividends per share (Unadj.)	Rs	0.00	0.00

Ratio Analysis for IDFC FIRST BANK

• Efficiency Ratios

  Credit/Deposit Ratio: The bank's credit/deposit ratio deteriorated and stood at 97.0x during FY24, from 105.1x during FY23. The credit/deposit ratio tells us how much money a bank has raised in the form of deposits and has deployed as loans.

  Debt to Equity Ratio: The bank's debt to equity ratio decreased and stood at 7.81x during FY24, from 7.81x during FY23. The debt to equity ratio of a bank tells us how much debt a bank uses relative to its equity.

• Liquidity Ratios

  Capital Adequacy Ratio (CAR): IDFC FIRST BANK's capital adequacy ratio (CAR) was at 16.1% as on 31 March 2024 as compared to 16.8% a year ago. This ratio helps measure the financial strength of the bank or any finance company to meet their obligations using their assets and capital.

  A bank that has a good CAR has enough capital to absorb potential losses. Thus, it has less risk of becoming insolvent and losing depositor's money.

  Provision Coverage Ratio (PCR): Apart from CAR, you also need to take a look at the bank's PCR and LCR ratios. Provisioning coverage ratio (PCR) is the percentage of funds that a bank sets aside for covering losses due to bad debts.

  So a high PCR ratio means asset quality issues are under control and the bank is not vulnerable.

  Liquidity Coverage Ratio (LCR): The LCR is designed to ensure that banks hold a sufficient reserve of high-quality liquid assets to allow them to survive a period of significant liquidity stress lasting 30 calendar days.

• Profitability Ratios

  Return on Equity (ROE): The return on equity (ROE) ratio for the bank deteriorated and stood at 9.1% during FY24, from 9.6% during FY23. The ROE measures the ability of a firm to generate profits from its shareholders capital in the company.

  Return on Assets (ROA): The return on asset (ROA) ratio of the bank deteriorated and stood at 0.99% during FY24, from 1.04% during FY23. The ROA measures how efficiently the company uses its assets to generate earnings.

  Return on Capital Employed (ROCE): The ROCE for the bank deteriorated and stood at 9.10% during FY24, from 9.16% during FY23. The ROCE measures the ability of a bank to generate profits from its total capital (shareholder capital plus debt capital) employed in the bank.

• NPA Ratios

  Gross NPA Ratio: The gross NPA ratio is the ratio of a bank's gross NPAs to gross advances. IDFC FIRST BANK's gross NPA ratio stood at 1.9% as of 31 March 2024 compared to 2.5% in the same period a year ago.

  A high gross NPA ratio is a bad thing as it indicates how much of a bank's loans are in danger of not being repaid.

  Net NPA Ratio: In simple language, net NPAs are simply the total non-performing assets minus the provision left aside. It gives you the exact value of NPAs after the bank has made provisions.

  The net NPA ratio of IDFC FIRST BANK was 0.6% in financial year 2024. This compared with 0.9% a year ago.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*
Credit/Deposit Ratio	x	105.1	97.0
Debt to Equity Ratio	x	7.8	7.8
Loans / Deposits	x	0.4	0.3
Capital Adequacy Ratio	%	16.8	16.1
Return on Equity	%	9.6	9.1
Return on Assets	%	1.0	1.0
Return on Capital Employed	%	9.2	9.1
% of Gross NPAs	%	2.5	1.9
% of Net NPAs	%	0.9	0.6
Yield on Advances	x	12.6	13.3
Yield on Investments	x	5.8	5.8

To see how IDFC FIRST BANK has performed over the last 5 years, please visit here.

IDFC FIRST BANK Share Price Performance

Over the last one year, IDFC FIRST BANK share price has moved down from Rs 87.5 to Rs 72.8, registering a loss of Rs 14.7 or around 16.8%.

Meanwhile, the S&P BSE BANKEX is trading at 56,780.9 (down 0.4%). Over the last one year it has moved up from 50,491.3 to 56,780.9, registering a gain of 6,289.6 points (up 12.5%).

Overall, the S&P BSE SENSEX is up 19.8% over the year.

(To know more, you can check out historical annual results for IDFC FIRST BANK here and quarterly results for IDFC FIRST BANK here)