IDFC First Bank plans to grow deposits by around 25 percent CAGR until financial year 2026-27, said V Vaidyanathan, managing director and chief executive officer in annual report of FY24.
“We plan to grow our branches by only 10 percent annually but grow deposits by ~25 percent CAGR until FY27. Many digitization efforts are under implementation,” Vaidyanathan said.
Total deposits of IDFC First Bank increased by 38.7 percent on-year from Rs 1. 45 lakh crore as of March 31, 2023 to Rs 2.01 lakh crore as of March 31, 2024.
CASA deposits grew by 31.7 percent on-year from Rs 71,983 crore as of March 31, 2023 to Rs 94,768 crore as of March 31, 2024. CASA Ratio stood at 47.2 percent as of March 31, 2024.
In the first quarter of the current financial year, total deposits of the bank increased by 35.8 percent on-year from Rs 1.54 lakh crore as of June 30, 2023 to Rs 2.09 lakh crore as of June 30, 2024.
Vaidyanathan further said that the bank plans to reduce the overall Cost to Income ratio by about 800 basis points (bps) from 72.9 percent in FY24 to 65 percent by FY27 and continue to improve from there.
The bank’s Opex is expected to grow only by 19-20 percent this FY25, while income is expected to grow by about 23-24 percent, Vaidyanathan said.
“This will result in continued increase in Core Operating Profits. During FY25, we expect provisions as a percent of Assets to normalise, as the recovery from COVID provided portfolio has tapered off. Going forward, we expect provisions as percent of assets to be stable,” he added.
Further, he added that bank’s cost of funds was at 6.38 percent is among the lowest in the peer group of mid-tier new-generation private sector banks, and will further come down as the lender will pay off residual high-cost legacy borrowings.
Yet, compared to other mid-tier banks that have similar or higher COF than ours, we raised over 2X retail deposits per branch on an incremental basis based on LCR disclosures, Vaidyanathan said.
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