IDFC First Bank Q3FY26 Results
PAT jumps 48%
Next HDFC Bank?
I have been hearing the same about IDFC First since 2021-22. However, I never bought the idea. However, I did take an entry in the bank in 2024 because valuations looked excellent back then (not a recommendation). The company reported its December quarter results on Saturday. Let us check the results.
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IDFC First Bank reported a 48% year-on-year rise in net profit to Rs 503 crore for the third quarter of FY26, driven by strong growth in loans and deposits, improving asset quality and a stable margin profile.
Total customer business rose to Rs 5.62 lakh crore during the quarter, reflecting the bank’s expanding balance sheet and growing customer base. Loans and advances grew 20.9% year-on-year to Rs 2.79 lakh crore, while customer deposits increased 24.4% to Rs 2.83 lakh crore.
Net interest margin stood at 5.76% in Q3 FY26, reflecting stable core earnings. Core operating metrics also benefited from lower provisions, which declined 3.7% quarter-on-quarter to Rs 1,398 crore.
The bank’s retail-focused strategy continued to strengthen its liability profile. CASA deposits surged nearly 33% year-on-year to Rs 1.50 lakh crore, pushing the CASA ratio up to 51.64%. This helped reduce the cost of funds to 6.11% during the quarter.
Asset quality improved further, with the gross non-performing asset ratio declining to 1.69%, down 25 basis points from a year ago. Net NPA remained stable at 0.53%.
The bank’s wealth management business saw strong traction, growing 31% year-on-year to Rs 58,957 crore. Its credit card franchise also expanded, with cards in force rising to 4.3 million.
Vaidyanathan, MD and CEO, said, “We are seeing a strong business momentum across all our main lines of businesses, including lending, deposits, wealth management, transaction banking etc. Our asset quality has improved with GNPA at 1.69% and Net NPA at 0.53% as of 31st December 2025. On cost of funds, we expect it to further drop from here because of recent revision in savings rates, which will enable us to expand our lending franchise.”
As of the end of the quarter, IDFC First Bank’s customer base stood at 35 million, with a nationwide presence across more than 60,000 locations through 1,066 branches. The bank’s market capitalisation stood at Rs 71,825.04 crore.
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Solid breakdown of the quarterly results. The CASA ratio climbing to 51.64% is probably the most underrated metric here becuase it directly translates to cheaper funding costs going forward. I've been tracking a few mid-tier banks over the past year and IDFC's deposit mobilization strategy seems to be working way better than their peers. Curious if the improvement in NPAs holds up once theystart expanding their loan book more aggressively.