IDFC First Bank Q3 Results: Net Profit Surges 48.1% YoY To Rs 503 Cr On Strong Margins; Asset Quality Improves

The Board of Directors of IDFC FIRST Bank, in its meeting held today, approved the unaudited financial results for the quarter and nine months ended December 31, 2025. Profitability trends were encouraging despite a volatile interest rate environment.

Net interest margin stood at 5.76% in Q3 FY26, higher sequentially by 17 bps, though marginally lower on a YoY basis due to base effects. Core operating profit grew 11.6% YoY to Rs 1,937 crore, reflecting operating leverage and controlled costs. The standout was net profit, which surged 48.1% YoY and 42.6% QoQ to Rs 503 crore, highlighting improving earnings quality and normalization of credit costs.

Capital adequacy remained excellent at 16.22% as of end-December 2025, up considerably on a sequential basis, providing considerable space for financing future growth.

On the asset side, loans and advances expanded to Rs 2.79 lakh crore, up 20.9% YoY and 4.8% QoQ. While net NPAs were steady at a low 0.53%, gross NPAs dropped to 1.69%, improving by 25 basis points YoY and 17 bps QoQ. Additionally, the SMA 1+2 book for the retail, rural, and MSME categories improved to 0.88%, highlighting enhanced early-stage stress management and credit discipline.

Deposits, which climbed 24.4% YoY to Rs 2.83 lakh crore, remained a major growth driver. The CASA ratio jumped by 390 basis points over the previous year to a robust 51.6% while CASA deposits expanded even faster, at over 33% YoY. The bank's cost of funds dropped to 6.11%, improving by 38 basis points YoY and 12 basis points sequentially, which is a structural benefit for margins heading forward.

Mr. V Vaidyanathan, MD and CEO said "We are seeing a strong business momentum across all our main lines of businesses, including lending, deposits, wealth management, transaction banking etc. Our asset quality has improved with GNPA at 1.69% and Net NPA at 0.53% as of 31st December 2025. On cost of funds, we expect it to further drop from here because of recent revision in savings rates, which will enable us to expand our lending franchise.

As of December 31, 2025, total client business had increased to Rs 5.62 lakh crore, representing a strong 22.6% YoY growth and approximately 5% sequential growth.

One of India's rapidly expanding private banks, IDFC FIRST Bank had 35 million clients and a customer business of Rs. 5,62,090 crore, comprising Rs. 2,82,662 crore in deposits and Rs. 2,79,428 crore in loans and advances, as of December 31, 2025. Loans increased 20.9% YoY and customer deposits climbed 24.3% YoY. The bank reached over 60,000 cities, towns, and villages, operating through 1,066 branches during Q3FY26.