IDFC First Bank

IDFC FIRST Bank

Headquarters in Bandra Kurla Complex, Mumbai
Company type	Public
Traded as	BSE:  539437 NSE:  IDFCFIRSTB
ISIN	INE092T01019
Industry	Banking Financial services
Predecessor	IDFC Bank Capital First Ltd.
Founded	October 2015;9 years ago (2015-10)
Headquarters	Mumbai, Maharashtra, India
Key people	V. Vaidyanathan (MD & CEO)
Products	Consumer banking Credit cards Home loans Loans against property Personal loans Consumer Durable loans Vehicle loans Business loans Micro Enterprise loans Private banking Wealth management Investment banking Corporate banking Wholesale banking
Revenue	₹36,257 crore (US$4.3 billion) (2024) [1]
Operating income	₹6,239 crore (US$750 million) (2024) [1]
Net income	₹2,942 crore (US$350 million) (2024) [1]
Total assets	₹296,210 crore (US$35 billion) (2024) [2]
Total equity	₹25,145 crore (US$3.0 billion) (2024) [2]
Number of employees	41,141 (March 2024)
Subsidiaries	IDFC FIRST Bharat
Capital ratio	13.28% [1]
Rating	CRISIL AA+/Stable [3] Ind-Ra IND AA+/Stable [4] CARE AA+/Stable (NCDs) [5]
Website	www.idfcfirstbank.com

IDFC First Bank (stylised as IDFC FIRST Bank) is an Indian private sector bank formed by the merger of the banking arm of Infrastructure Development Finance Company and Capital First, which was an Indian non-bank financial institution. ^[6]

History

IDFC Limited was set up in 1997 by Government of India to finance infrastructure projects in India. With time, the company diversified into asset management, institutional broking and investment banking. In 2014, the Reserve Bank of India granted in-principle approval to IDFC Limited to set up a new bank in the private sector. ^[7] Following this, the IDFC Limited divested its infrastructure finance assets and liabilities to a new entity - IDFC Bank. The bank was launched through this demerger from IDFC Limited, and it was officially inaugurated by the Prime Minister of India Narendra Modi in October 2015. ^{[8] [9]}

IDFC Bank started operations on 1 October 2015. ^{[10] [11]} The parent entity, IDFC Limited, retained the AMC, institutional broking, and infrastructure debt fund businesses through IDFC Financial Holding Company Limited. ^[12]

IDFC Bank faced challenges due to bad loans from legacy infrastructure accounts. A planned merger with the Shriram Group was called off. By September 2017, the bank's deposits totaled ₹38,890 crore, with a CASA ratio of just 8.2%. ^[13]

Capital First merger

In January 2018, IDFC Bank and MSME financing company Capital First announced a merger. ^[14] Capital First was founded as Future Capital Holdings under the Future Group, and was acquired by Warburg Pincus and V. Vaidyanathan in 2012. ^{[15] [16]} As per a September 2017 stock filing, Capital First had a retail loan portfolio of ₹229.7 billion. ^[17] 13.9 shares of IDFC Bank were issued for every share of Capital First as part of the merger scheme. ^[18]

The merger was completed in December 2018, with IDFC Bank changing its name to IDFC First Bank. ^{[19] [20]} Post the merger, Vaidyanathan took over as the MD and CEO of the merged entity. The Reserve Bank of India approved his appointment for a period of three years, effective from December 19, 2018. ^[21]

The bank transformed from infrastructure financing to retail banking in four years since the merger. Its CASA ratio increased from 8.6% to 49.77% and retail deposits went from 27% to 76% of total deposits, as of March 2023. ^{[22] [23]}

IDFC Limited merger

In July 2023, the board of the bank approved the merger with IDFC Limited. ^{[24] [25]} After receiving clearance from the Competition Commission of India ^[26] and the Reserve Bank of India, ^[27] the merger proposal was approved by the National Company Law Tribunal in May 2024. The proposal, endorsed by the bank's shareholders and NCD holders, involved two steps–IDFC FHCL merging with IDFC Limited, followed by IDFC Limited merging into IDFC First Bank. ^{[28] [29]}

On 1 October 2024, IDFC Limited merged with the bank. ^[30] As a result of the merger, 155 equity shares of the bank were allotted for every 100 equity shares of IDFC Limited held by each shareholder in the latter. ^[31]

Shareholding

On 22 February 2023, IDFC Limited announced that it would invest ₹2,200 crore in the bank, increasing its stake in the bank up to 40% from 36.38%. ^[32] Also, on 22 February 2023, the bank issued 12,03,745 equity shares to its employees under the company ESOP plan. ^[33]

On September 12, 2023, US-based GQG Partners acquired an additional 5.1 crore shares, equivalent to a 0.76% stake, from V. Vaidyanathan in a block deal conducted on the stock exchange. As a result, GQG Partners' ownership in the bank rose to 3.36%. ^{[34] [35]}

In July 2024, Life Insurance Corporation raised its stake in the bank to 2.68% by purchasing shares of the lender at Rs 80.63 each, with a total acquisition cost of ₹1,500 crore (US$180 million). ^[36]

Operations

A branch of IDFC First Bank in Prabhadevi, Mumbai

As of November 2022, the bank had 809 branches, 249 asset service centres, 925 ATMs, and 606 rural business correspondent centres across the country. ^{[37] [38] [39]}

Products and services

A branch of IDFC First Bank in HSR Layout, Bangalore

The bank provides products and services related to retail banking, wholesale banking and investment banking. ^{[40] [41] [42] [43]}

In 2017, IDFC Bank launched an Aadhaar-linked cashless merchant solution. ^{[44] [45]}

The bank became a member of the Open Network for Digital Commerce in September 2022. Subsequently, it began enrolling small merchants, who are existing customers with current accounts, onto a partner application registered with ONDC. ^{[46] [47]} In 2023, it launched central bank digital currency under the guidance of the RBI. ^[48]

Rural lending

The bank's rural lending portfolio consists of 60% women borrowers, as of October 2023. ^[49] The typical loan size is ₹2-3 lakh. The portfolio has a 99.7% collection rate, a gross NPA of 1.2%, and a net NPA of 0.3%. ^[50]

In South and Central India, the rural lending is led by IDFC First Bharat Limited (IFBL) which traces its roots to Grama Vidiyal, a Tamil Nadu-based public charitable trust established in 1986. In 2003, it became a microfinance institution called Grama Vidiyal Micro Finance Limited (GVMFL). In 2016, IDFC Bank acquired GVMFL, turning it into a wholly-owned subsidiary of the bank. ^{[51] [52]} GVMFL later became known as IDFC First Bharat Limited. ^[53]

Financials

The bank achieved a profit after tax (PAT) of ₹2,957 crore (US$350 million) crore in the financial year 2024, maintaining a capital adequacy ratio of 16.82%. The bank's retail loans showing a gross non-performing asset (NPA) ratio of 1.88% and a net NPA ratio of 0.60% as of March 31, 2024. ^[54] As of 30 September 2024, the overall gross NPA ratio is 1.92%, while the net NPA ratio is 0.48%. ^[55]

In 2023, it became one of the top 10 banks in India by market capitalization. ^{[56] [57]}

Sponsorships

In 2020, the bank signed Amitabh Bachchan as its first brand ambassador. ^[58]

In 2023, the bank obtained the title sponsorship rights for all Board of Control for Cricket in India's international and domestic home matches. ^{[59] [60]}

Philanthropy

Under bank’s employee-funded Ghar Ghar Ration program, the bank employees will supply ration kits to 50,000 low income customers whose livelihoods has been impacted by the pandemic. ^[61] As many as 16,000 beneficiaries have been reached across Rajasthan, Madhya Pradesh, Maharashtra, Odisha, Gujarat, Karnataka, Haryana, Tamil Nadu, Andhra Pradesh, and Chhattisgarh under this program. The lender has also identified 250 vulnerable families who have lost an earning member of their family to COVID-19 with a cash relief support of ₹10,000 in a partnership with 'Give India'. ^[62]

Awards and recognitions

2019

• Utkarsh Puraskar’ DigiDhan award - Digital Payments Utsav by Ministry of Electronics and Information Technology.
• Best Private Bank Award: Distinction in Digital Innovation & Services 2019 - Asian Private Banker. ^[63]
• Most Promising New Bank in India 2019, Capital Finance International (CFI). ^[64]

2021

• Excellence in Water and Sanitation Financing award Water.org. ^[65]
• Most Trusted Brands of India 2021 - CNBC TV18. ^[66]
• Best for HNW in India 2021 - Asiamoney. ^[67]

2022

• The Financial Express's Best Digital Bank for 2022–23 ^[68]
• Best Sustainable Banking Strategy India 2022, Capital Finance International (CFI). ^[69]
• Best CSR Sustainability Awards for "Shwetdhara" campaign - The Economic Times. ^[70]

2023

• Capital Finance International's Outstanding Commitment to ESG Performance (India) for the year 2023 ^[71]

See also

• Banks portal

• Banking in India
• List of banks in India
• Reserve Bank of India
• Indian Financial System Code

References

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2. "IDFC First Bank" (PDF).
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70. www.ETBFSI.com. "ET BFSI Awards 2022". ETBFSI.com. Retrieved 29 February 2024.
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Further reading

• Biswas, Debasish; Pimpale, Nihal; Ashara, Konark (21 September 2017). "Connected by Design - Our Learnings from Designing Digital Profiler Journeys: IDFC Bank Digital Experience". Human-Computer Interaction – INTERACT 2017. Lecture Notes in Computer Science. Vol. 10516. Springer. pp. 340–343. doi:10.1007/978-3-319-68059-0_25. ISBN   978-3-319-68058-3.
• P. Andrews, Sneha; Gnanakumar, Baba. PC, Gita; Pradeep Kumar, John (eds.). A Study on the Fundamental Analysis of Selected Private Sector Banks Listed in NSE: HDFC Bank, IDFC First Bank, and Axis Bank. Virtual National Conference Spectrum Series 2020. Kristu Jayanti College and Bangalore Chamber of Industry and Commerce. p. 118. ISBN   978-81-949292-3-9 – via ResearchGate.
• Dhar, Santosh; Dhar, Upinder; Jaroliya, Pragya, eds. (2022). Reimagining Business Education and Industry in 2030. Allied Publisher. p. 24. ISBN   978-9390951-21-5.
• Mishra, Pooja; Guru Sant, Tatavarty (22 February 2024). "Examine the level of environmental, social and governance disclosure in sustainability report – a study of the Indian banking sector". International Journal of Innovation Science. 16 (2). Emerald Group Publishing: 420–442. doi:10.1108/IJIS-08-2022-0136. ISSN   1757-2223.
• Das, Ashish (May 2024). Benchmarking Reasonableness of Service Charges by Banks in India (Report). Indian Institute of Technology Bombay. doi:10.5281/zenodo.11453947 – via Zenodo.