IDFC First Bank expects the strong profitability seen in the April-June quarter to continue through FY27, according to managing director and chief executive V Vaidyanathan. The bank’s outlook is being supported by lower credit costs, reduced provisions and a softer cost of funds, factors that are helping strengthen overall earnings.
Vaidyanathan said credit cost for the period was 2.13% of loans, including the microfinance portfolio, compared with guidance of 2.10%. Even with that slight gap, the bank appears encouraged by the credit quality trends seen in the first quarter and is now targeting a meaningfully lower credit cost for the year.
The management’s guidance points to credit cost easing by about 50 basis points, to around 1.5% to 1.6%. If that trend holds, it would give IDFC First Bank more room to improve profitability, especially as provisioning pressure declines and funding costs remain favorable.
The broader message from the bank is that its recent record quarterly performance is not being viewed as a one-off. Instead, management sees the combination of improving asset quality, moderating costs and steadier margins as key drivers that can continue to support earnings in the coming periods.
