IDFC First Bank Q2 net profit triples to ₹1,045 crore as asset quality improves

IDFC First Bank reported a nearly threefold increase in standalone net profit to ₹1,045 crore for the second quarter ended September 30, 2026, driven by sustained credit demand, reduced provisions, and gains in core operating earnings.

The private sector lender's net interest income rose 21 per cent year-on-year to ₹6,184 crore, up from ₹5,113 crore in the corresponding period last year. Core operating profit grew 38.5 per cent to ₹2,527 crore, reflecting strengthening operational scale across retail and corporate banking segments. This marks the second consecutive quarter in which the bank's quarterly net profit crossed the ₹1,000 crore mark.

Credit expansion and deposit mobilization

The bank's balance sheet continued its upward growth trajectory, supported by healthy credit expansion and structured deposit gathering. Total loans and advances, including credit substitutes and FCNR(B)-backed lending, grew 30.1 per cent year-on-year to ₹3,46,913 crore. Excluding FCNR(B)-secured loans, credit growth stood at 22.2 per cent.

Total deposits increased 25.9 per cent year-on-year to ₹3,48,583 crore, boosted by a major foreign currency mobilization drive during the quarter.

Lower provisions boost asset profile

A notable factor in the quarterly performance was the mobilization of ₹34,390 crore in Foreign Currency Non-Resident (Bank) deposits. Managing director and chief executive officer V. Vaidyanathan stated that securing these deposits provides the bank with structural liquidity over a three- to five-year horizon, with fully loaded funding costs running about 1 per cent below comparable domestic fixed deposits.

Asset quality metrics demonstrated steady improvement across portfolios. Provisions fell 21.7 per cent to ₹1,137 crore from ₹1,452 crore a year earlier, bringing annualized credit costs down to 1.01 per cent of average assets. Gross non-performing assets declined to ₹4,467 crore, or 1.32 per cent of gross advances, compared with 1.48 per cent a year prior. Net non-performing assets stood at 0.40 per cent.

During the quarter, S&P Global Ratings assigned IDFC First Bank its debut international credit rating of BBB- with a stable outlook, reflecting confidence in India's banking sector health and improving the bank's ability to access international wholesale debt markets.