IDFC First Bank Limited

Highlights of AGM 2022:
V. Vaidyanathan:

• “We expect RoE to tend upwards of 15%. That is how our business is fundamentally structured. When I saw 15, I mean upwards of 15, I mean 16, 17 percent return on equity, that is how the underlying economics are.”

• “Yield, cost of funds, operating costs all may come down a bit. Short point is that it is all making good return on equity. You keep compounding the machine, the bank will get to see very, very good equity.”

• “Our Board’s internal target for PAT was 1700 crore for this year, but frankly, we’re running a bit ahead of that.”

• “On the deposit side, we may be letting go of some fee here and there as it is a customer first bank and all that, but I’m telling you, the goodwill of the bank is amazing, just amazing. Because our employees reflect the goodwill. We rarely lose customers on the deposit side.”

• “We are very happy with our card business. We are touching about 1 million cards, and around 2 million cards, the profitability starts coming in. We think that by this year, that is by FY24, our internal estimate is that we should post 100 crore of profit, and by FY25, our internal estimate is – so please treat it with the skepticism you should because the numbers are not done yet – but our internal estimates are that it will cross like 400-500 crore of profit in the subsequent year. It’s peak takeoff. We have done 2-3 years of serious investment. But that’s how businesses are built.”

• “We think that our current mix is giving us a proper six percent NIM, no problem with that. If you ask us what our lookout is for 2023, we feel NIM six percent will probably be there. Now if you ask me to look far ahead into FY24, 25, 27, 28, well, I don’t know, it might come down, but at that point of time it could be because by that time mortgage may be a bigger proportion of the book and so on. But I can’t take a definite position on that.”

• “Only thing we don’t post is our Return on Equity. The only thing I tell you is that when we solve the issue of Return on Equity, I believe our bank will be valued what it deserves to be. And people like Morgan Stanley who are valuing us today at 30-34 bucks, they don’t understand the bank .”

• “We will open branches as and when required. We have given a guidance of 800 by FY25, we are far ahead of that. There is no fixed number from here on.”