IDFC First Bank Posts Loss Of ₹1,538 Cr In Q3

The newly-merged entity, IDFC First Bank, has reported a net loss of ₹1,538 crore for the third quarter of the fiscal due to exceptional accelerated amortisation charges. Its net profit for the third quarter last fiscal was ₹146.11 crore.

“As a prudent measure, intangible assets acquired or arising on amalgamation have been fully amortised through profit and loss account in the quarter and nine months ended December 31, 2018. This accelerated amortisation charge to profit and loss account for the quarter and nine months ended December 31, 2018, of ₹2,599.35 crore, is exceptional in nature and resulted in loss for the quarter ended December 31, 2018,” the bank said in a regulatory filing. Excluding this, IDFC First Bank’s net profit would have risen to ₹153.02 crore for the October to December quarter against a net loss of ₹35.12 crore in the same period a year ago.

“This was a unique quarter because of the merger. No other expenses related to the merger are expected in the next quarter,” said V Vaidyanathan, Managing Director and CEO, IDFC First Bank, adding that there is no impairment in terms of net worth due to these charges.

This is the first quarterly result announced since the merger of Capital First and its subsidiaries with IDFC Bank was completed in December.

Overall, the net worth of the bank has increased after amalgamation to ₹18,375.64 crore as on December 31, 2018, from ₹14,775.96 crore as on September 30, 2018.

The lender reported a net interest income of ₹1,145 crore, and total income of ₹1,449 crore for the third quarter of the fiscal. Net interest margin was 3.27 per cent in the third quarter of the fiscal (after merger), compared to 1.7 per cent in the pre-merger second quarter of the fiscal.

“The expansion of NIM was primarily due to the addition of the retail book through its merger with Capital First,” said Vaidyanathan.

Gross non-performing assets of the bank, as a percentage of gross advances, was at 1.97 per cent, and net NPA was at 0.95 of net assets as of December 31, 2018. Provision coverage ratio stood at 72.9 per cent as of December 31, 2018.