IDFC First Bank Unveils Vision 2.0, Aiming for ₹6 Lakh Crore in Deposits by FY29

IDFC First Bank Unveils Vision 2.0, Aiming for ₹6 Lakh Crore in Deposits by FY29

IDFC First Bank has set bold targets as part of its Vision 2.0 strategy, aiming to secure ₹6 lakh crore in deposits and ₹5 lakh crore in loans by the fiscal year 2029. The bank also seeks to boost its profitability to ₹12,000 crore within the same timeframe, according to Managing Director and CEO, V Vaidyanathan.

Reflecting on the bank's evolution, Vaidyanathan highlighted the challenges it faced in its early years after transitioning from an infrastructure-focused Development Finance Institution (DFI) to a commercial bank. "We had a net interest margin (NIM) of 1.7% at the start, and low retail deposits coupled with early losses in 2019 made growth seem difficult. Analysts saw it as a catch-22 situation—investing in growth would lead to more short-term losses, but without growth, the problem would persist," Vaidyanathan said.

However, by the end of FY24, IDFC First Bank had successfully turned the corner. It reported a profit of ₹2,947 crore, with its current account savings account (CASA) ratio reaching 47%. The bank’s long-term credit rating was upgraded to AA+ stable by four rating agencies, and it is now working towards achieving an AAA rating.

Since its merger in December 2019, IDFC First Bank has witnessed significant growth. Its share price more than doubled, moving from ₹37.6 to ₹75.4 as of March 31, 2024, outperforming the Nifty Private Bank index's 57% growth during the same period. Customer deposits grew from ₹38,455 crore to ₹1,93,753 crore, with retail deposits surging from ₹10,400 crore to ₹1,51,343 crore. The bank’s CASA ratio also jumped from 8.7% to 47.2%.

In terms of asset quality, the credit-deposit ratio has improved, dropping from 125% to 98.4%, while legacy borrowings of ₹61,342 crore have been repaid. The bank’s gross non-performing assets (NPAs) have reduced from 2.43% to 1.89%, and net NPAs have fallen from 1.27% to 0.60%.

IDFC First Bank’s financial health has also seen substantial improvement. Its net worth has increased from ₹18,159 crore to ₹32,161 crore, while the capital adequacy ratio has grown from 15.47% to 16.11%. The bank’s core operating profit has surged from ₹749 crore in FY19 to ₹6,030 crore in FY24, and it turned a net loss of ₹1,944 crore in FY19 into a net profit of ₹2,957 crore in FY24.

As the bank continues to execute its Vision 2.0 plan, it is well-positioned for sustained growth and profitability in the coming years.