IDFC First Bank Q4 FY26: Profit up 5%, GNPA 1.61%

Key Q4 FY26 takeaways

IDFC FIRST Bank reported a year-on-year increase in standalone net profit for the March 2026 quarter, alongside sequential improvements in key asset quality ratios. The bank also disclosed that it fully recognised the financial impact of a fraud incident linked to its Chandigarh branch during Q4 FY26. Provisions fell sharply, which the management said was the lowest level in two years. Deposit and loan growth remained strong, with the CASA ratio close to 50%.

Profit rises, helped by tax credit and lower provisions

Standalone net profit rose 4.9% to Rs 318.94 crore in Q4 FY26 compared with the year-ago period. Total income increased 7.73% year-on-year to Rs 12,182.81 crore for the quarter ended March 2026. The bank reported a tax credit of Rs 129.64 crore in Q4 FY26, compared with a tax expense of Rs 132.50 crore in Q3 FY26 and Rs 57.06 crore in Q4 FY25. The tax credit partly cushioned the impact of one-off charges on the reported profit.

Normalised PAT and one-time impact details

The bank reported normalised profit after tax for Q4 FY26, excluding one-time items, at Rs 746 crore. It said it has fully recognised the financial impact of the “Chandigarh incident” in Q4 FY26, with a post-tax impact of Rs 483 crore. The bank added that it does not expect further material adjustments related to the matter.

Chandigarh incident: what the bank disclosed

According to the bank, the incident relates to a fraud detected in February 2026 at its Chandigarh branch involving unauthorised transactions in certain Haryana government-linked accounts. The initial discrepancy was around Rs 590 crore, as per the bank’s disclosure. The issue was linked to alleged collusion by some employees and external entities and was confined to a specific set of accounts. The bank said it has completed reconciliation and settled claims, with no further discrepancies identified.

Net interest income up 15.7%; NIM improves sequentially

Net interest income (NII) rose 15.7% year-on-year to Rs 5,677 crore in Q4 FY26 from Rs 4,907 crore in the year-ago period. Net interest margin (NIM) stood at 5.93% in Q4 FY26, down 2 basis points year-on-year but up 18 basis points sequentially. The cost of funds improved to 6.00%, down 51 basis points year-on-year and down 11 basis points quarter-on-quarter. Core operating profit (excluding trading income) declined 7.8% year-on-year to Rs 1,492 crore.

Asset quality improves: GNPA 1.61%, NNPA 0.48%

The bank’s asset quality improved during the quarter, with the gross NPA ratio declining to 1.61% as of March 2026 from 1.69% in December 2025 and 1.87% in March 2025. Net NPA came in at 0.48%, improving from 0.53% in both the previous quarter and the same period last year. In absolute terms, gross NPAs were Rs 4,558.52 crore as of March 2026, compared with Rs 4,614.14 crore in December 2025 and Rs 4,433.58 crore a year ago. SMA 1 and 2 (retail, rural and MSME) also improved to 0.78%, which the bank said indicates better early-stage asset quality trends.

Provisions fall to Rs 869.24 crore, lowest in two years

Provisions and contingencies declined 40.07% year-on-year to Rs 869.24 crore. Provisions as a percentage of loans fell to 1.63% in Q4 FY26 from 2.05% in Q3 FY26, while provisions as a percentage of total assets declined to 1.18% from 1.45% over the same period. The bank also utilised Rs 35 crore of contingency provisions on its microfinance portfolio during the quarter and said it carries forward Rs 130 crore into FY27.

Deposits, CASA and advances: growth remains strong

Total customer deposits rose 17.3% year-on-year to Rs 2,84,453 crore. CASA deposits increased 24.0% year-on-year to Rs 1,46,650 crore, and the CASA ratio stood at 49.80%. Advances grew 20.0% year-on-year to Rs 2,90,278 crore, with 87% of loan growth driven by mortgages, vehicle loans, consumer loans, business banking and wholesale segments. Total customer business increased 18.6% year-on-year to Rs 5,74,731 crore.

Cards, wealth, and capital buffers

The bank said its credit cards in force crossed 4.5 million during the quarter. It also reported that its wealth management business grew 23% year-on-year to over Rs 57,000 crore. Capital adequacy ratio stood at 15.60% as of March 2026, which the bank said remains comfortably above regulatory requirements.

Management commentary and what investors tracked

MD and CEO V Vaidyanathan said asset quality remains stable, with stress largely behind in the microfinance portfolio. He also said provisions have declined to the lowest level in two years and that the bank has started FY27 on a strong footing in terms of deposit growth. Separately, the bank said the financial results for the quarter and year ended March 31, 2026 were approved by the Board of Directors in a meeting held on April 25, 2026.

Stock move after the update

Shares of IDFC First Bank fell 0.88% to settle at Rs 67.23 on Friday, April 24, 2026.

Snapshot table: key Q4 FY26 numbers

Why the quarter mattered

The quarter combined two separate themes investors typically track closely in banking results: the underlying trajectory of profitability and the resolution of a specific operational event. On profitability, the bank reported higher NII and a sequential improvement in NIM, while core operating profit (excluding trading income) declined year-on-year. On asset quality, both GNPA and NNPA improved sequentially and year-on-year, while provisions fell meaningfully and were described as the lowest in two years. On the Chandigarh incident, the bank’s disclosure that it has completed reconciliation, settled claims, and does not expect further material adjustments was a key part of the update.

Conclusion

IDFC FIRST Bank reported a modest rise in reported Q4 FY26 profit to Rs 318.94 crore, alongside improving GNPA and NNPA ratios and sharply lower provisions. The bank said it has fully recognised the post-tax impact of the Chandigarh incident in the March quarter and does not expect further material adjustments. Investors are likely to track whether the sequential NIM improvement sustains and whether provisioning remains near the current two-year low in FY27.