A very large percentage of retail investors, apparently those who do not have a close understanding of banking shares seem to be assessing the IDFCB share by only looking at its balance sheet figures and comparing them with other private sector bank figures. Minus the narrative it is an incorrect picture. This has kept the share price subdued and therefore it continues to be an opportunity.
On the other hand the bank has created several potentially robust revenue streams like fast tags, wealth management, credit cards and now Digital Rupee. If DR concept takes off in the country, which is quite likely, IDFCB will have the first mover advantage. DR balances will carry zero interest, thus becoming a large, free of cost liabilities source. Most of our businesses in India need cash transactions as a matter of necessity, convenience and therefore preference.
Also heard from a branch manager that the bank is going to open 200 additional branches in 2023. Apparently a large number of existing new branches are crossing the break even point and turning profitable thus creating capability for more new branches. This however needs confirmation from other community members. If true, then it would be a big positive for sustained growth of both liabilities as well as credit. On an average it is taking about two years to turn profitable for an IDFCB branch.
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