IDFC FIRST Bank Merger and Financial Overview
Management
Commentary
Management Commentary 2/4
Strong CASA Base: We have built a strong CASA base of ~50% which is best in class in the industry. In absolute terms we have
grown CASA by ~Rs. 42,000 crore in 3 years that demonstrates our capability on this front.
Stable Asset Quality: For retail and commercial loans, which is majority of the book, our GNPA and NNPA has reduced to 2.63%
and 1.15%. We are confident to continue the downward trajectory in retail NPA to reach our near 10-year long term GNPA and
NNPA levels of 2% and 1% respectively. All input indicators of asset quality (such as cheque bounce, collection efficiency,
recoveries, vintage analysis) point to the same.
Strong Capital Position: The bank is strongly capitalised at 16.8% and has significant headroom for Tier 2 capital, and loan growth.
Strong incremental Unit Economics: Our incremental unit economics of the bank are excellent. Our NIM is over 6%. Incremental
ROE on Retail lending is between 18-20% after adjusting for credit costs and tax. This will show in the P & L in due course.
Diversified fee income: We have developed multiple and diversified streams of income in the bank across Fastag, Cash
management, wealth management, wholesale loans, retail loans, insurance distribution, mutual fund distribution and in all
businesses we feel we are yet at the start of the journey. We continue to launch new business lines. Retail Fees constitutes 84%
of the total fee income which points to granularity and sustainability of this line item.
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IDFC FIRST
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