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IDFC First Bank

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IDFC FIRST Bank
FormerlyIDFC Bank (2015–2018)
Company typePublic
BSE: 539437
NSE: IDFCFIRSTB
ISININE092T01019
IndustryBanking
Financial services
FoundedOctober 2015; 9 years ago (2015-10)
HeadquartersMumbai, Maharashtra, India
Key people
V. Vaidyanathan (MD & CEO)
Products
RevenueIncrease ₹36,257 crore (US$4.2 billion) (2024)[1]
Increase ₹6,239 crore (US$730 million) (2024)[1]
Increase ₹2,942 crore (US$340 million) (2024)[1]
Total assetsIncrease ₹296,210 crore (US$35 billion) (2024)[2]
Total equityIncrease ₹25,145 crore (US$2.9 billion) (2024)[2]
Number of employees
41,141 (March 2024)
Subsidiaries
Capital ratio13.28% [1]
Rating
Websitewww.idfcfirstbank.com

IDFC First Bank (stylised as IDFC FIRST Bank) is an Indian private sector bank based in Mumbai. Founded in 2015 as a banking subsidiary of IDFC Limited, it shifted focus from infrastructure financing to retail banking in the years after its 2018 merger with Capital First.[6] In 2024, the bank took over the parent company IDFC Limited in a reverse merger.

History

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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 asset management, institutional broking and infrastructure debt fund businesses through IDFC Financial Holding Company Limited (IDFC FHCL).[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

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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] 139 shares of IDFC Bank were issued for every 10 shares of Capital First as part of the merger share swap.[18]

The merger completed in December 2018, with IDFC Bank changing its name to IDFC First Bank.[19][20] 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 19 December 2018.[21]

The bank transitioned 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 up from 27% to 76% of total deposits, as of March 2023.[22][23]

IDFC Limited merger

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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

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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 12 September 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

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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

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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

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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

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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 31 March 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

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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

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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

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2019

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2021

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2022

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2023

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

See also

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Wikimedia Commons has media related to IDFC FIRST Bank.

References

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  1. ^ a b c d "IDFC First Bank" (PDF).
  2. ^ a b "IDFC First Bank" (PDF).
  3. ^ "CRISIL upgrades IDFC First Bank's LT rating to 'AA+'". Capital Market. 5 June 2023. Retrieved 21 June 2023.
  4. ^ "Ind-Ra affirms IDFC First Bank's debt instruments ratings with stable outlook". Financial Express. 12 December 2023. Retrieved 26 December 2023.
  5. ^ "IDFC FIRST Bank Ltd Long Term Instruments - Non Convertible Debentures October 03, 2023" (PDF). CARE Ratings. 3 October 2023. Retrieved 1 February 2024.
  6. ^ "7 things to know about IDFC Bank | Business Standard News". Business-standard.com. 1 October 2015. Retrieved 15 October 2016.
  7. ^ "RBI grants in-principle approval to IDFC, Bandhan for new bank licences". The Economic Times. Retrieved 12 December 2022.
  8. ^ PTI (19 October 2015). "Narendra Modi inaugurates IDFC Bank, talks of banking reforms". mint. Retrieved 12 December 2022.
  9. ^ "PM inaugurates IDFC Bank | Business Standard News". Business Standard India. Business-standard.com. 19 October 2015. Retrieved 15 October 2016.
  10. ^ Saha, Manojit (25 July 2015). "IDFC Bank to start operations from Oct 1 | Business Standard News". Business Standard India. Business-standard.com. Retrieved 15 October 2016.
  11. ^ "IDFC Bk to start ops with few branches by Oct 1: Rajiv Lall". Moneycontrol.com. 12 April 2015. Retrieved 15 October 2016.
  12. ^ Gopakumar, Gopika (21 July 2021). "IDFC can exit as promoter of IDFC First Bank, clarifies RBI". mint. Retrieved 12 December 2022.
  13. ^ Iyer, Aparna (15 January 2018). "IDFC Bank, Capital First merger: will the shoe fit this time?". Mint (newspaper). Retrieved 29 October 2024.
  14. ^ Tadas, G. A. (August 2020). Need for Setting Up of a New Development Bank (RIS-DP #254) (PDF). New Delhi, India: Research and Information System for Developing Countries. p. 7.{{cite book}}: CS1 maint: date and year (link)
  15. ^ "Future Group sells Future Capital Holdings to Warburg Pincus for Rs 800 cr". The Economic Times. 5 June 2012. Retrieved 12 December 2024.
  16. ^ Kalbag, Chaitanya (3 July 2012). "V. Vaidyanathan takes wing with a $17 million stake in a star NBFC". Business Today. Retrieved 3 August 2023.
  17. ^ Roy, Anup (13 January 2018). "IDFC Bank to merge with Capital First, Vaidyanathan to succeed Lall". Business Standard. Retrieved 29 October 2024.
  18. ^ sundarajan, Priya (13 January 2018). "IDFC Bank to take over Capital First in share swap deal". www.thehindubusinessline.com. Retrieved 12 December 2022.
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  22. ^ "IDFC FIRST Bank FY23 Profit After Tax Highest-Ever at Rs. 2,437". Bloomberg.com. 2 May 2023. Retrieved 21 June 2023.
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  25. ^ "IDFC to merge with IDFC First Bank". The Hindu. 3 July 2023. ISSN 0971-751X. Retrieved 4 July 2023.
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  27. ^ Bhattacharya, Shubhayan (18 December 2023). "IDFC First Bank Gets RBI Nod For Merger Of IDFC, IDFC Financial Holding With Self". NDTV Profit. Retrieved 26 December 2023.
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  31. ^ Deshpande, Swapnil (27 September 2024). "IDFC First Bank completes merger with IDFC Limited - CNBC TV18". CNBCTV18. Retrieved 15 October 2024.
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  33. ^ "IDFC First Bank allots shares worth Rs 1.2 cr to employees as stock options". Free Press Journal. Retrieved 23 February 2023.
  34. ^ "IDFC First Bank rises 2% on Rs 479.5-cr block deal with GQG Partners". Moneycontrol. Retrieved 14 September 2023.
  35. ^ "US-based GQG Partners ups IDFC First Bank stake, acquires shares from CEO V. Vaidyanathan". www.telegraphindia.com. Retrieved 14 September 2023.
  36. ^ "LIC raises stake in IDFC First Bank to 2.68%". The Hindu. 4 July 2024. ISSN 0971-751X. Retrieved 29 October 2024.
  37. ^ Market, Capital (5 November 2022). "IDFC First Bank gets board approval to raise Rs 4,000 cr". Business Standard India. Retrieved 12 December 2022.
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  39. ^ Kayastha, Anshika (8 August 2023). "Want to stay on the pitch for long, not hit sixes and fours: IDFC First Bank MD". BusinessLine. Retrieved 3 September 2023.
  40. ^ "Home loans are our biggest driver and they'll keep growing: V Vaidyanathan, MD & CEO, IDFC First Bank". Financialexpress. 7 May 2022. Retrieved 12 December 2022.
  41. ^ Kulkarni, Sneha. "IDFC First Bank revises savings account interest rate: Earn up to 6% interest rates on this amount". The Economic Times. Retrieved 10 August 2022.
  42. ^ "IDFC First Bank to give 7% interest on savings account opened through video KYC". Financialexpress. 28 May 2020. Retrieved 10 August 2022.
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  46. ^ Livemint (7 September 2022). "IDFC First Bank joins ONDC". mint. Retrieved 13 July 2023.
  47. ^ "IDFC First Bank joins ONDC — what does it mean for you?". cnbctv18.com. 7 September 2022. Retrieved 13 July 2023.
  48. ^ Ray, Anulekha (9 November 2022). "RBI CBDC: Digital Rupee pilot starts from November 1; SBI, HDFC, 7 other banks to participate in wholesale launch". The Economic Times. ISSN 0013-0389. Retrieved 13 July 2023.
  49. ^ Velonie, Ajit; Sri Narayanan, Subha; Gupta, Leena (9 October 2023). "CRISIL Rating Rationale IDFC FIRST Bank Limited". CRISIL. Retrieved 30 November 2024.
  50. ^ Sharma, Saurabh (13 December 2023). "BT500: 'Tragic to see rural India is most under-financed,' says IDFC First Bank MD & CEO V Vaidyanathan". Business Today. Retrieved 30 November 2024.
  51. ^ "IDFC Bank buys Grama Vidiyal Micro". BusinessLine. 25 July 2016. Retrieved 31 March 2024.
  52. ^ "IDFC Bank acquires Grama Microfinance". The Indian Express. 13 July 2016. Retrieved 31 March 2024.
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  55. ^ Singh, Navdeep (28 October 2024). "IDFC First Bank shares nosedive 10%, hit 52-week low as Q2 profit plummets 73%". The Economic Times. ISSN 0013-0389. Retrieved 29 October 2024.
  56. ^ Sultana, Nasrin. "How Does IDFC First Stack Up Among India's Top 10 Most Valued Banks". Forbes India. Retrieved 14 September 2023.
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  58. ^ IDFC FIRST Bank (11 March 2020). "IDFC FIRST Bank names India's iconic personality Mr. Amitabh Bachchan as Brand Ambassador" (PDF). Press Release. Retrieved 21 March 2020.
  59. ^ Farooqui, Javed (25 August 2023). "BCCI awards title sponsorship rights to IDFC First for Rs 235 crore". The Economic Times. ISSN 0013-0389. Retrieved 3 September 2023.
  60. ^ "IDFC FIRST Bank secures title rights for Team India's home internationals for Rs 4.2 crore per match". cnbctv18.com. 25 August 2023. Retrieved 3 September 2023.
  61. ^ "IDFC FIRST Bank launches Customer COVID relief Ghar Ghar Ration Program". Financialexpress. 11 June 2021. Retrieved 12 December 2022.
  62. ^ "IDFC First Bank Employees to Fund Covid Relief for Customers". Outlook Money. Retrieved 12 December 2022.
  63. ^ "Best Private Bank – Digital Innovation & Services". Asian Private Banker. Retrieved 29 February 2024.
  64. ^ marten (24 November 2019). "IDFC FIRST Bank: Most Promising New Bank India 2019". CFI.co. Retrieved 29 February 2024.
  65. ^ Bandyopadhyay, Tamal (2021). "INCLUSIVE FINANCE INDIA REPORT 2020 - An ACCESS Publication" (PDF). Water.org. Retrieved 29 February 2024.
  66. ^ "Most Trusted Brands Of India 2021". CNBCTV18. 1 April 2021. Retrieved 29 February 2024.
  67. ^ "Best for HNW in India 2021". Asiamoney. 15 June 2021. Retrieved 29 February 2024.
  68. ^ "FE BEST BANKS AWARDS: Rajeev Chandrasekhar to grace FE awards event today". Financialexpress. 16 October 2023. Retrieved 23 November 2023.
  69. ^ marten (26 October 2022). "IDFC FIRST Bank: Best Sustainable Banking Strategy India 2022". CFI.co. Retrieved 29 February 2024.
  70. ^ www.ETBFSI.com. "ET BFSI Awards 2022". ETBFSI.com. Retrieved 29 February 2024.
  71. ^ marten (22 November 2023). "IDFC FIRST Bank: Outstanding Commitment to ESG Performance (India) 2023". CFI.co. Retrieved 23 November 2023.

Further reading

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