IDFC FIRST Bank Merger and Financial Overview

Management Commentary Management Commentary 1/4 We focused on building a strong platform for the first three years: On merger, we had a large loan book of Rs. 1,04,660 crore but very low retail deposits of only Rs. 10,400 crore. This had to be addressed. So we slowed down overall loan growth for the first 3 years (loan growth of CAGR 6% FY19 to FY22), and grew deposits strongly (Retail Deposits growth CAGR 72%) to strategically strengthen the Bank. This phase of consolidation is now complete. We have built a strong foundation which we believe will be a springboard for growth from here on. Loan book to grow from here on: We have made significant progress during the last three years (FY 19-22). We expect the loan book to grow at ~20-25% on a sustainable basis from here on for the foreseeable future. We have strong and proven competence in building retail lending business with high asset quality (GNPA ~2% and NNPA ~1%), strong margins, and high ROE (~15%, incremental ROE ~20) for over a decade. All Legacy Accounts provided for, or already disclosed in NPA: We have sufficiently provided for all legacy stressed corporate and infrastructure loans. The share of Infrastructure book has further reduced to 5.2% of the total Funded Assets from 9.2% as on March 31, 2021. The spectrum related telecom account BGs issued by the Bank have been released. High quality of incremental Wholesale Lending: We have sanctioned Rs. 17,500 crores of loans to new corporate clients since merger and there is nil NPA on this book. Demonstrated capability to raise Deposits: We have demonstrated our strong capability to raise deposits based on our strong brand, customer first products and excellent service. We grew retail deposits by Rs. 54,820 crore to reach Rs. 68,035 crore in just three years. This shows that we can comfortably raise deposits as required for expected growth of 20-25% of the loan book. 2 IDFC FIRST Bank

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