IDFC First Bank - A Better Tomorrow: Motilal Oswal Initiates Coverage

BQ Prime’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BQ Prime’s subscribers an opportunity to expand their understanding of companies, sectors and the economy. .Motilal Oswal Report.IDFC First Bank Ltd. has strengthened its balance sheet over the past few years as it consciously increased the mix of retail business. The bank reported five times growth in retail deposits over the past three years and simultaneously improved current account and savings account mix to 50%.Further, the retail loan book posted an impressive 31% compound annual growth rate over FY19-22. IDFC First Bank is well positioned to benefit from gradual run-down of its high-cost legacy borrowings over FY23-26E (Rs 224 billion at 8-9% cost) and replace them with deposits (at ~5.5% cost). ~77% of such bonds will be refinanced by FY25E. This will potentially add ~Rs 7.5-8.0 billion to net interest income (FY22 NII: Rs 97 billion) in due course.IDFC First Bank has made substantial investments in building the franchise, which has resulted in sub-optimal cost metrics. However, we expect the operating leverage to improve (cost/income ratio at 66% by FY25 versus 75% in FY22) thereby aiding earnings..Click on the attachment to read the full report:.DISCLAIMERThis report is authored by an external party. BQ Prime does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of BQ Prime..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

IDFC First Bank - A Better Tomorrow: Motilal Oswal Initiates Coverage

IDFC First Bank is well positioned to benefit from gradual run-down of its high-cost legacy borrowings over FY23-26E.

Choose a plan