DBT Bureau
Pune, 24 Oct 2026
IDFC FIRST Bank reported a 196.5% year-on-year rise in Profit After Tax (PAT) to ₹1,045 crore in Q2 FY27, for the quarter ended September 30, 2026. For the first half of FY27, the bank’s PAT stood at ₹2,120 crore, with Return on Assets (ROA) at 0.99%, according to its regulatory filing.
Total deposits grew 25.9% year-on-year and 11.8% quarter-on-quarter to ₹3,48,583 crore. The average Current Account and Savings Account (CASA) ratio remained strong at 48.4% in Q2 FY27, compared with 50.1% previously. The decline was primarily due to the large mobilisation of FCNR(B) deposits during the quarter.
Loans and advances, including credit substitutes and FCNR(B)-backed loans, grew 30.1% year-on-year to ₹3,46,913 crore. Excluding loans secured by FCNR(B) deposits, loan growth stood at 22.2%, gross of IBPC.
The bank continued to improve its operating efficiency, with operating expense growth remaining around 500 basis points lower than income growth for the second consecutive quarter. The incremental cost-to-income ratio stood at 55% in H1 FY27, while the core cost-to-income ratio, excluding trading gains, improved to 70.16% in Q2 FY27 from 70.73% in Q1 FY27.
Core operating profit, excluding trading gains, increased 38.5% year-on-year to ₹2,527 crore in Q2 FY27.
Asset quality remained stable, with Gross Non-Performing Assets (GNPA) at 1.32% and Net Non-Performing Assets (NNPA) at 0.40%. Credit cost, as a percentage of average assets, declined to 1.01%. The bank reported a Return on Assets of 0.93% for Q2 FY27.
FCNR(B) deposits support growth
During Q2 FY27, IDFC FIRST Bank mobilised ₹34,390 crore, or approximately US$3.6 billion, in FCNR(B) deposits despite having no branch, subsidiary or representative office outside India. The bank said the mobilisation demonstrates its digital capabilities and the trust it enjoys among customers.
These deposits are largely of three-to-five-year tenors, providing structural liquidity for the coming years. The fully loaded cost of FCNR(B) deposits, including Priority Sector Lending (PSL) benefits, is approximately 1% lower than the cost of raising domestic fixed deposits.
The bank expects FCNR(B) mobilisation to benefit Net Interest Income (NII), PAT, Earnings Per Share (EPS) and Return on Equity (RoE). However, it is optically dilutive to Net Interest Margin (NIM) because the balance sheet expanded by ₹24,885 crore as loans were extended by the IBU branch against FCNR(B) deposits.
S&P assigns investment-grade rating
IDFC FIRST Bank also received its first international rating, with S&P Global Ratings assigning it an investment-grade long-term rating of ‘BBB-‘.
Commenting on the results, V. Vaidyanathan, MD and CEO, said, “Our PAT crossed ₹1,000 crore for the second quarter in a row, in both Q1 and Q2 FY27. We are also now internationally rated, with an investment-grade rating from S&P Global Ratings. Our Opex growth has been lower than income growth by about 500 basis points for the second consecutive quarter,demonstrating strong operating leverage. Consequently, our cost-to-income ratio continues to decline, and our ROA is now within touching distance of 1%.
Further, raising over ₹34,000 crore of FCNR(B) deposits has been a significant positive for the Bank. It provides us with structural liquidity of 3 to 5 years, which is particularly valuable in a rising interest-rate environment. The fully loaded cost of these deposits, including PSL benefits, is about 1% lower than the cost of raising comparable deposits in the domestic market. Overall, Q2 FY27 was an excellent quarter, and we hope to sustain this momentum.”
