• Financial performance: IDFC First Bank reported a 21% rise in net interest income, a 132% increase in net profit to 1,075 crore (normalized at around 900 crore excluding treasury gains), and achieved a 1% return on assets ahead of schedule. The bank also raised its FY27 net interest margin guidance to 5.8% from 5.75%, driven by a 45 basis point reduction in cost of funds over the past year.
• Credit cost trajectory: Annual credit costs have declined to 1.5–1.6% due to a structural transition toward safer borrower profiles, with management noting that lower provisioning is strictly formula-driven based on improving portfolio performance.
• Vehicle finance stability: Addressing broader sector concerns regarding vehicle loan stress, management clarified that its vehicle segment remains stable with pre-NPA Special Mention Accounts (SMA) well-managed at approximately 1%.
• Operating expense model: Higher operating costs relative to peers stem from variable sourcing and volume-linked expenses, which support a 25% inclusive lending portfolio that generates book yields of around 22% with controlled risk.