IDFC First Bank Q4 FY26: NIM 5.93%, PAT Rs 319cr

Key takeaways from the Q4 FY26 earnings call

IDFC First Bank (NSE: IDFCFIRSTB) reported its Q4 FY26 numbers after a quarter that included a one-off fraud incident and a loss in treasury trading. Management highlighted that underlying operating trends such as loan growth, margins, and asset quality improved, while headline profitability was affected by these non-recurring items.

Loans and advances including credit substitutes grew 20% year-on-year to about Rs 2,90,000 crore. Net interest margin (NIM) came in at 5.93% on an AUM basis, above the bank’s earlier guidance of 5.85% for the quarter. On asset quality, both gross and net NPA ratios improved quarter-on-quarter.

Loan book growth stays broad-based

Management said the quarter saw healthy traction across mortgages, vehicle loans, consumer loans, wholesale loans, and business banking loans. Collectively, these segments accounted for about 87% of the total growth in the loan book. The bank’s commentary framed this as a continuation of its strategy of building a diversified book across multiple lending businesses.

The bank also flagged credit cards as a milestone area, stating that cards crossed 4.5 million during the quarter. The credit card book grew by about 21% year-on-year.

Microfinance book stabilises after multiple quarters

On microfinance (MFI), management said the decline “has got arrested” after many quarters. The MFI book stood at about Rs 6,662 crore as of March 2026. The bank added that 89% of the MFI book is covered through CGSMU.

Disbursements in MFI rose by about 27% on a sequential basis. Management indicated that the MFI book is expected to start contributing to overall growth and the profit and loss again in the next year.

Deposits: growth was modest during the quarter

Customer deposits stood at about Rs 2,84,000 crore, with year-on-year growth of about 17%. However, deposit growth in the quarter was described as modest at about 1%.

Management attributed the quarterly deposit softness to a reduction in savings account interest rates in certain buckets, the impact of a one-off fraud incident during the quarter, and tight liquidity conditions that prevailed through the quarter.

Asset quality improves across key metrics

The bank reported improvement in headline asset quality ratios. Gross NPA improved by 8 basis points from 1.69% to 1.61%. Net NPA improved from 0.53% to 0.48%.

For the retail, rural and MSME segment, gross NPA ratio improved by 8 basis points to 1.47%. Management also said collection efficiency excluding MFI was strong at 99.6%.

Profitability: headline PAT impacted by one-offs

IDFC First Bank reported profit after tax (PAT) of Rs 319 crore for Q4 FY26. Management stated the quarter included one-time items, including an upfront impact linked to the fraud incident.

The bank said it paid claims of over Rs 646 crore of principal related to the fraud incident, with a post-tax impact of about Rs 480 crore. Management added that if the fraud impact is grossed up, PAT for the quarter would be about Rs 800 crore.

In addition, the bank reported a trading loss of about Rs 159 crore, against a backdrop of widening government bond yields during the quarter. On the positive side, management cited an income tax order that resulted in a tax refund of about Rs 173 crore.

After excluding the fraud impact, the treasury loss, and the tax refund, management said the bank’s normalized profit after tax was about Rs 746 crore.

Margins and fee income: NIM beats guidance

The bank reported NIM of 5.93% on an AUM basis for Q4 FY26. Management said this included some benefit due to day-count convention because February has fewer days, and also because the bank took a cautious approach on investments and reduced the average investment book.

For the full year, NIM was 5.75%, and management said it is expected to be stable into the next year. Fee and other income grew by 21.3% in the quarter, compared with 15.5% in Q3.

Costs, provisions, and credit cost trend

Operating expenses (OPEX) for the quarter were stated at Rs 6,249 crore. For the full year, management said OPEX growth was 12.3% if the fraud incident is excluded.

Provisions reduced quarter-on-quarter by 18% from Rs 1,398 crore to Rs 1,143 crore. Overall credit cost for the quarter came at 1.63%, improving by about 42 basis points from the previous quarter. Excluding microfinance, credit cost for the overall loan book was 1.61% in the quarter. For the full year, credit cost was stated at 213 basis points.

Management commentary: outlook and risk review

Management said the bank has undertaken a comprehensive review of the portfolio to assess exposure to potentially impacted sectors given the West Asia crisis, including demand disruption, fuel-related risk, and supply chain challenges.

The CEO said the bank is confident the episode linked to the crisis is behind it, and stated that Q1 FY27 itself should see strong growth in the bank. Separately, management also mentioned branch additions, noting about 80 branches were added in Q4.

Snapshot of reported metrics

What the quarter signals for investors

The Q4 FY26 print shows two parallel stories. One is the headline PAT of Rs 319 crore, which management linked to specific one-offs in the quarter. The other is the operational track record management emphasised through normalized PAT, improving NIM, and better asset quality.

The bank’s loan growth of 20% year-on-year to about Rs 2,90,000 crore, along with the improvement in GNPA and NNPA, points to continued momentum on the core lending side. At the same time, deposit growth in the quarter was modest, and management itself linked it to rate actions, liquidity conditions, and the one-off incident.

Conclusion

IDFC First Bank’s Q4 FY26 results combined strong loan growth and improved asset quality with a profitability headline shaped by one-time items. Management pointed to a normalized PAT of about Rs 746 crore and guided for stable NIM into the next year. The next key checkpoint will be Q1 FY27, where management expects stronger growth trends to show up in reported numbers.