IDFC Bank reported weaker-than-estimated January-March quarter performance on Wednesday with net profit declining close to 32 percent quarter-on-quarter (QoQ) to Rs 165 crore from Rs 242 crore.
IDFC Bank is a subsidiary of infrastructure finance company IDFC Ltd, which started banking operations in October 2015.
Data for year-on-year (YoY) comparison is, therefore, unavailable. Gross non-performing assets (GNPA) jumped over 300 basis points QoQ to 6.16 percent in the fourth quarter from 3.09 percent.
Net NPA increased to 2.39 percent from 0.98 percent in the third quarter. The increase in NPA was largely on account of high exposure to infrastructure and telecom sectors with part of the old IDFC loans that came to the bank.
Sunil Kakar, chief financial officer of the bank, however, clarified in a briefing that the surge in NPA does not impact the Profit and Loss account as these loans had already been provided for. "We have ring-fenced our assets via provisions.
Increase in the NPA number does not signal deterioration in the asset quality," he said, adding, overall size and volume of stressed assets has not grown.
He said it will take a few quarters for these assets to be worked out and it will be difficult to predict when the gross NPA number will peak.
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