Management Commentary
1. Strong deposit growth: Total deposits grew 25.9% YoY and 11.8% QoQ to reach ₹3,48,583 crore.
2. Healthy CASA: Average CASA ratio remained strong at 48.4% in Q2 FY27. The slight decline from 50.1% was primarily due to the large mobilisation of FCNR(B) deposits during the quarter.
3. Loan growth: Loans and advances, including credit substitutes and FCNR(B)-backed loans, grew 30.1% YoY to ₹3,46,913 crore. Excluding loans secured by FCNR(B) deposits, loan growth was 22.2%, gross of IBPC.
4. Operating leverage: Opex growth has remained lower than income growth by about 500 bps YoY for consecutive quarters.
5. Improving cost-to-income ratio: Incremental cost-to-income ratio was 55% in H1 FY27. The core cost-to-income ratio (excluding trading gains) improved to 70.16% in Q2 FY27 from 70.73% in Q1 FY27.
6. Strong growth in core operating profit: Core operating profit, excluding trading gains, grew 38.5% YoY to ₹2,527 crore in Q2 FY27.
7. Stable asset quality: GNPA stood at 1.32% and Net NPA at 0.40%. Credit cost, as a percentage of average assets, reduced to 1.01%.
8. PAT grew 196.5% YoY to ₹1,045 crore in Q2-FY27, resulting in an ROA of 0.93%. H1 FY27 ROA stood at 0.99%.
9. FCNR(B) mobilisation: During Q2 FY27, the Bank mobilised ₹34,390 crore (approximately US$3.6 billion) of FCNR(B) deposits despite having no branch, subsidiary or representative office outside India. This demonstrates the Bank's digital capabilities and the trust it enjoys among customers.
These deposits are largely of 3-to-5-year tenor and provide strong structural liquidity for the coming years. The fully loaded cost of FCNR(B), including PSL benefits, is approximately 1% lower than the cost of raising domestic fixed deposits.
FCNR mobilisation should benefit NII, PAT, EPS and RoE, although it is optically NIM-dilutive because the balance sheet expanded by ₹24,885 crore as loans were extended by IBU branch against FCNR(B) deposits.
10. Debut international rating: S&P Global Ratings assigned the Bank an investment-grade long-term rating of 'BBB-'.
Commenting on the results, Mr. 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.”
About the Bank
1. Vision: To build a world-class Bank in India, founded with principles of Ethical, Digital, and Social Good Banking.
2. Scale: IDFC FIRST Bank is one of India’s fast-growing private banks, building its UI, UX and technology stack with fintech-grade capabilities. As of September 30, 2026, the Bank serves over 40 million customers, with a customer business at ₹ 6,88,328 crore ($72.0b) comprising customer deposits of ₹ 3,41,415 crore ($35.7b) and loans assets of ₹ 3,46,913 crore ($36.3b). Customer deposits grew 26.9% YOY and loan assets 30.1% YOY. We reach over 60,000 cities, towns, and villages, operate through a network of about 1,200 branches and digital channels.
3. Scope: We are a universal Bank offering complete range of services, including Retail, MSME, Rural, Startups, Corporate Banking, Cash Management, Credit Cards, Wealth Management, Deposits, Government Banking, Working Capital, Trade Finance, and Treasury solutions.
4. Ethical Banking: We are committed to doing right even when customers are not watching. We have simplified descriptions, calculations, and legal jargon to avoid confusing customers.
5. Digital Banking: The Bank's modern technology stack delivers high-quality services across all channels like mobile, branch, internet banking, call centers and relationship managers. Built on cloud-native, API-led, microservices architecture, supported with data, analytics, AI, and fine aesthetics, we strive to deliver fintech-grade experiences on banking platform.
6. Social Good: We work for society. We have impacted over 40 million lives including 3.6 million women entrepreneurs. We have financed over 7.5 million lifestyle improvement loans (for laptops, washing machines, refrigerators etc. that enhance the quality of life of middle class), 2.5 lakh electric 2W and 3W vehicles, 2.7 lakh water, sanitation, and hygiene loans, 2 million livelihood (cattle) loans, and 300,000+ SMEs. On deposits, we provide access of premium investment research, which is usually reserved for the wealthy, even to those holding balances as low as ₹ 5,000. Our ESG scores are high and improving.
7. Customer Friendly Banking: We make banking easy by having a customer first approach. We have waived fees on 36 essential savings account services which are commonly charged in the market, the first and only bank in India to do so. We create “pull” products that customers actively seek out.
8. Governance: We adhere to regulatory guidelines in letter and spirit and actively work with regulators to make things better. We take pride in maintaining highest levels of corporate governance.
9. Shareholders: We are building a well-diversified universal banking portfolio designed to deliver consistent ROE of 16%+.
10. Employees: IDFC FIRST Bank is designed to be a happy place to work, with cutting-edge roles, meaningful growth opportunities, and a culture of meritocracy. Compensation is healthy, efforts are recognized, and employees experience the pride and excitement of creating a world-class Bank in India.
Cautionary Statement: “Statements made in this release may contain certain forward-looking statements based on various assumptions on the Bank’s present and future business strategies and the environment in which it operates. Actual results may differ substantially or materially from those expressed or implied due to risk and uncertainties. These risks and uncertainties include the effect of economic and political conditions in India and abroad, volatility in interest rates and in the securities market, new regulations and Government policies that may impact the Bank’s businesses as well as the ability to implement its strategies. The information contained herein is as of the date referenced and the Bank does not undertake any obligation to update these statements. The Bank has obtained all market data and other information from sources believed to be reliable or its internal estimates, although its accuracy or completeness cannot be guaranteed.”
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