IDFC First Bank expects its strong earnings momentum to continue after posting record profitability in the April-June quarter. Managing director and CEO V Vaidyanathan said the bank is seeing support from two key trends: falling credit costs and a lower cost of funds, both of which are helping profitability.
The bank said its credit cost came in at 2.13% of loans, including the microfinance portfolio, compared with earlier guidance of 2.10%. Even with that slight gap, management appears encouraged by the first-quarter credit quality trend and believes the overall direction remains favorable.
For the current year, the lender is now aiming for credit costs to decline by about 50 basis points, with a target range of roughly 1.5% to 1.6%. That improvement, if achieved, would give IDFC First Bank more room to protect margins and maintain earnings strength.
Vaidyanathan's comments indicate that the bank sees the recent quarter not as a one-off performance, but as part of a broader earnings trajectory. With asset quality holding up in the early part of the year and funding costs easing, IDFC First Bank is positioning for continued profitability support in the periods ahead.
