Shares of IDFC First Bank rallied close to eight percent intraday on October 25 following the sequential improvement in asset quality, though net loss widened QoQ as well as YoY in Q2 FY20.
The bank posted a loss of Rs 679.50 crore in quarter-ended September against a loss of Rs 617.35 crore in the April-June period. Loss for the year-ago period stood at Rs 369.6 crore, but it was not comparable as it was the pre-merger period.
The loss was on account of a one-time tax impact of Rs 751 crore due to markdown of existing deferred tax assets, the lender said in a BSE filing.
Net interest income, the difference between interest earned and interest expended, grew 16 percent QoQ to Rs 1,363 crore, with a 42 bps QoQ improvement in net interest margin to 3.43 percent.
Asset quality improved on sequential basis with gross non-performing assets at 2.62 percent in Q2 (against 2.66 percent QoQ) and net NPA at 1.17 percent (against 1.35 percent QoQ).
Commenting on the quarter gone by, V Vaidyanathan, Managing Director and CEO, said, "Asset quality in the retail business continued to be stable. Gross retail NPAs was 2.31 percent in Q2 as compared to 2.32 percent in Q1, and the net NPA reduced to 1.08 percent from 1.14 percent QoQ," IDFC First Bank said.
Provisions and contingencies dropped sharply to Rs 317.35 crore at the end of September quarter, against Rs 1,280.75 crore reported in the April-June period.
The cost-to-income ratio improved to 75.61 percent for the quarter-ended September compared to 78.60 percent QoQ.
The stock was quoting at Rs 41.65, up Rs 2.80, or 7.21 percent on the NSE at 1205 hours IST.
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