IDFC FIRST Bank Q2 Results: Profit Nearly Triples, Margin Narrows

IDFC FIRST Bank Q2 results on Saturday showed a standalone net profit of ₹1,044.60 crore, almost three times the ₹352.31 crore a year earlier, though foreign-currency deposit inflows reduced the margin.

The bank’s board of directors approved the numbers for the quarter ended 30 September 2026 on 24 October, as per the bank’s regulatory filing. Standalone profit declined around 2.8% from ₹1,074.96 crore in the previous quarter.

Net profit on a consolidated basis stood at ₹1,049.17 crore, compared with the previous quarter’s profit of ₹1,147.82 crore, a decline of 8.59%. In the same quarter last year, the company had reported a consolidated profit of ₹347.80 crore.

Key numbers from IDFC FIRST Bank Q2 results

As per the filing, the bank’s net interest income, which is the difference between interest income and interest outgo, increased by around 21% on a year-on-year basis to ₹6,184 crore. The bank’s fee and other income also went up by 24.5% to ₹2,285 crore, as per its investor deck.

Net interest margin came in at 5.58%, compared with 5.90% in the June quarter. In its presentation, the bank attributed part of the decline to large foreign currency non-resident (bank) deposits, known as FCNR(B), and extra liquidity on its balance sheet.

There was a further improvement in asset quality. Gross NPA decreased to 1.32% from 1.51% at the end of June and 1.86% in the corresponding period last year. Net NPA reduced to 0.40% from 0.44%. The provision coverage ratio was 70.1%.

Provisions decreased to ₹1,137 crore from ₹1,452 crore in the year-ago quarter. Loans and advances stood at ₹3,46,913 crore, a year-on-year increase of 30.1%. Total deposits increased by 25.9% to ₹3,48,583 crore, and by 11.8% quarter-on-quarter.

FCNR(B) deposits lift growth but squeeze the margin

During the quarter, the bank raised ₹34,390 crore of FCNR(B) deposits, which made up around 10% of total deposits, as per the deck. Loans backed by FCNR(B) deposits stood at ₹24,885 crore. Growth in loans excluding FCNR(B)-backed loans was 22.2%.

Managing Director and CEO V Vaidyanathan said the FCNR(B) deposits provide the bank liquidity for three to five years at 1 per cent lower cost than domestic deposits. But the inflows altered the deposit profile.

The CASA ratio, the share of low-cost current and savings account deposits, declined to 48.4% from 50.1%. Reports attributed this largely to the high FCNR(B) inflow in the quarter.

Vaidyanathan said cost-to-income “continues to fall and ROA is near 1 per cent.” Return on assets was 0.93% for the quarter, while the CET1 ratio stood at 13.00% and the total capital adequacy ratio at 14.67%, the presentation showed.

What it means for investors, and what comes next

A low base makes the IDFC FIRST Bank Q2 results look stronger. The bank had posted a standalone net profit of ₹352.31 crore in the September 2025 quarter. Profit has now stayed above the ₹1,000 crore mark for two consecutive quarters.

The IDFC FIRST Bank Q2 results show a trade-off for investors: faster balance-sheet growth, funded partly by foreign-currency deposits, against a thinner margin in the near term. Kotak Mahindra Bank showed a similar trend this quarter, with large FCNR(B) inflows lifting its deposits but pulling its net interest margin lower.

The IDFC FIRST Bank share closed at ₹72.35 on the BSE on Friday, a decline of 3.47%, before its results. The stock has ranged between ₹58.08 and ₹89.58 over the last 52 weeks.

In its presentation, management projected NIM to stay similar to Q2 levels in the October–December quarter and improve to approximately 5.80% in the January–March quarter. The bank reiterated its credit cost estimate of 150–160 bps.

The bank also guided for loan growth of at least 20% and deposit growth of about 20–21%. The results filing did not mention any dividend for the quarter.

For more on how lenders are faring this earnings season, see our banking sector coverage and the latest business news from India and the US.