IDFC First Bank delivered exceptional financial results for Q2 FY27, with net profit surging 197% year-on-year to ₹1,045 crore from ₹352 crore in the corresponding quarter last year. According to The Times of India, this represents almost a triple increase in the bank's bottom line performance. The strong profit growth was driven by robust operational performance across key metrics, with the bank's board scheduled to meet on Saturday, October 24, 2026, to consider and approve the unaudited standalone and consolidated financial results for the quarter and half-year ended September 30, 2026. Latest reports from Motilal Oswal confirm that the bank's Q2 FY27 PAT of ₹10.4 billion was in line with expectations, showing healthy operating performance and robust business growth.
The bank demonstrated robust business expansion with total loan assets, including credit substitutes and loans backed by foreign currency non-resident bank (FCNR(B)) deposits, rising 30.1% year-on-year to ₹3,46,913 crore as of September 30, 2026, as per The Times of India. Excluding FCNR(B)-backed loans, growth stood at 22.2% on a gross basis, including inter-bank participation certificates (IBPC). Overall gross advances reached ₹3,38,929 crore, up 30% YoY, while total deposits grew 25.9% YoY to ₹3,48,583 crore. The CASA ratio improved to 51.3% in Q2 FY27, up from 50.8% in the previous quarter, though the average CASA ratio stood at 48.4% during the quarter, compared with 50.1% in the preceding quarter, primarily due to the large mobilisation of FCNR(B) deposits. The average liquidity coverage ratio increased to 125%, up from 116% in Q1 FY27.
The bank's net interest income (NII) rose 21% year-on-year to ₹6,184 crore from ₹5,113 crore in the year-ago period, as reported by The Times of India. Latest quarterly data shows NII grew 6.78% quarter-on-quarter to ₹6,185 crore from ₹5,974 crore in the previous quarter. However, net interest margin (NIM) fell to 5.6% from 5.9% in the quarter ended June 2026, largely due to a 16-basis-point impact from loans given to garner FCNR(B) deposits, as reported by The Economic Times. Motilal Oswal reports that NIM declined 32 basis points quarter-on-quarter to 5.58%, with the decline attributed to 16 basis points from loans against FCNR(B) deposits, 7 basis points from surplus liquidity, and 5 basis points from asset mix change. Published brokerage estimates compiled by Informist suggest net interest income of ₹6,196 crore, approximately +21% YoY, indicating the bank's ability to expand its core lending and deposit business effectively.
The bank showed significant improvement in asset quality metrics during the September quarter. Gross non-performing assets (NPA) declined to 1.32% from 1.86% in September 2025, while net NPA fell to 0.40% from 0.53% over the same period, according to The Times of India. This sequential improvement in asset quality indicates better risk management and collection efficiency, with the bank's credit cost, as a percentage of average assets, declining to 1.01% in Q2 FY27. The improved asset quality metrics provide a positive foundation for the bank's earnings announcement, though investors will monitor whether this trend continues in the current quarter.
The bank's Capital Adequacy Ratio increased to 14.67% from 14.11% at the end of September 2025, demonstrating a strengthened capital position. During Q2 FY27, the bank mobilised ₹34,390 crore (approximately $3.6 billion) of FCNR(B) deposits despite having no branch, subsidiary or representative office outside India, as reported by The Times of India. The FCNR(B) deposits, largely carrying tenures of three to five years, would provide structural liquidity in the coming years, with their fully loaded cost, including priority sector lending benefits, being approximately 1% lower than the cost of raising domestic fixed deposits. Speaking on the Q2 results, IDFC First Bank Managing Director and CEO V Vaidyanathan highlighted the bank's strong operational performance, stating that "Our PAT crossed ₹1,000 crore for the second quarter in a row, in both Q1 and Q2 FY27." He noted that the bank is now internationally rated with an investment-grade rating, and emphasized that "raising ₹34,390 crore ($3.6 billion) of FCNR(B) deposits has been a significant positive," providing structural liquidity of 3 to 5 years in a rising interest-rate environment.
