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IDFC First Bank earnings may get 4-7% boost from $3.57 billion FCNR(B) deposits

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IDFC First Bank earnings may get 4-7% boost from $3.57 billion FCNR(B) deposits

IDFC First Bank earnings may get 4-7% boost from $3.57 billion FCNR(B) deposits

The benefit will depend on how the deposits are deployed, with full deployment into higher-yielding assets offering the maximum estimated upside of 4.4% to net interest income and 6.8% to earnings per share.

FCNR(B) boost: $3.57 billion mobilisation could lift FY27 earnings by 4.1-6.8%, with NII upside of up to 4.4%. Deposit franchise: Retail deposits now account for 80% of customer deposits, while CASA stands at 51%; deposits are estimated to grow 25% annually through FY28. Loan growth: Net advances rose 20.8% year-on-year in 1QFY27, with the loan book projected to grow around 21% annually through FY28.Profitability recovery: Lower credit costs and operating leverage could take the cost-to-income ratio to 65% by FY28, with RoA at 1.2% and RoE at 11.9%.

8%, although the inflows could compress full-year net interest margins by 7-12 basis points. 8% to earnings per share, according to a report by Motilal Oswal Financial Services. 4% to incremental net interest income. The report estimates that the associated balance-sheet expansion could lower full-year NIMs by around 7-12 basis points, depending on the proportion deployed and the extent to which higher-cost deposits are retired.



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