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IDFC Bank: Provisions, operating costs limit bottomline - Views on News from Equitymaster
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  • Apr 29, 2016 - IDFC Bank: Provisions, operating costs limit bottomline

IDFC Bank: Provisions, operating costs limit bottomline
Apr 29, 2016

IDFC Bank declared its results for the fourth quarter of the financial year 2015-16 (4QFY16). Since the bank commenced operations on 1st October 2015 and this being the second quarterly performance, the year-ago figures are not available for comparison.

Performance summary
  • Net interest income grew by 8% on a Q0Q basis to Rs 4.2 bn in 4QFY16. For 2HFY16, the net interest income stood at Rs 8.5 bn.
  • Net advances grew by 5% on QoQ basis to 456.9 bn as on 31st March 2016.
  • NIMs (net interest margin) remained unchanged at 2% for 4QFY16.
  • Net NPAs (Non Performing Assets) ratio increased from 1% in 3QFY16 to 2.4% in 4QFY16.
  • Net profit fell 31.8% QoQ on the back of steep rise in other expenses coupled with lower treasury income. Although, the return on assets fell to 0.8% during the quarter, it stood at 1.1% for the 2HFY16.
  • Capital adequacy ratio stands at 22% of which Tier I capital ratio stands at 21.5% the end of 4QFY16.
  • The bank has declared a dividend of Rs 0.25 per share for FY16 and at the current market price, the dividend yield works out to 0.5%.

    Financial Snapshot
    Rs (m) 3QFY16 4QFY16 Change FY16
    Interest income 17,891 18155 1.5% 36,488
    Interest expense 14,028 13987 -0.3% 28,015
    Net Interest Income 3,863 4,168 7.9% 8,473
    Net interest margin (%) 2.00% 2.10% 2%
    Other Income 2,179 1377 -36.8% 4,032
    Other Expense 2,153 2947 36.8% 5,106
    Provisions and contingencies 123 119 -3.3% 242
    Profit before tax 3,766 2,479 -34.2% 7,158
    Tax 1,345 829 -38.4% 2,489
    Profit after tax/ (loss) 2,422 1,651 -31.8% 4,669
    Net profit margin (%) 13.5% 9.1% 12.8%
    No. of shares (m) 3392.6
    Book value per share (Rs)* 40.2
    P/BV (x) 1.19

    * (Book value as on 31st March 2016)

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