IDFC First Bank Ltd.Strong Momentum with Rising Profitability

IDFC First Bank delivered impressive Q3 FY26 results with profit after tax surging 43% quarter-on-quarter and 48% year-on-year to ₹503 crores, marking a significant inflection point in its transformation journey.

Net interest margin expanded 17 basis points sequentially to 5.76%, driven by cost of funds reduction, lower CRR requirements, and capital raise benefits. Management revised Q4 NIM guidance upward to 5.85% from 5.80% following savings account rate cuts. The bank achieved a milestone with cost of funds at 6.11%, now at par with mid-tier banks after a 169 basis point reduction since merger. Deposits grew robustly at 22.9% year-on-year to ₹2.9 lakh crores, with CASA deposits reaching a record ₹1.5 lakh crores, up 33% annually.

Credit costs improved to 2.05% from 2.24% in Q2, with management declaring the MFI crisis largely resolved and expecting normalization toward the 1.95% through-cycle target. The bank's risk-adjusted NIM of 4.3% significantly exceeds peer benchmarks, positioning it for sustained profitability growth as operating leverage improves.