As of December 31, 2025, IDFC First Bank Limited (NSE: IDFCFIRSTB) continues its trajectory toward building a world-class institution, reporting a significant expansion in its operational footprint and market presence. The Bank has successfully scaled its branch network to 1,066 branches, representing a 5X growth from the 206 branches present at the time of the merger in December 2018. This physical expansion is complemented by market leadership in the digital space, where the Bank’s mobile banking app is ranked #1 in India with high ratings on both Android (4.9) and iOS (4.8).
Year-Over-Year and Full-Year Growth Context The Bank recorded a stable balance sheet growth of approximately 20%. Total customer deposits reached ₹2,82,662 crore, marking a 24.3% YoY growth. Simultaneously, loans and advances grew 20.9% YoY to ₹2,79,428 crore. A critical milestone in its growth context is the reduction of the Credit-to-Deposit (CD) ratio from a high of 137% at the time of the merger to 93.9% currently.
Performance by Business Vertical and Key Segment Developments
• Retail Finance: Remains the primary engine of growth, reaching ₹1,64,122 crore (up 21.6% YoY). Key drivers within this segment include Mortgage Loans (up 15.5% YoY), Vehicle Loans (up 27% YoY), and Credit Cards (up 31.9% YoY).
• Business Finance: This vertical saw strong momentum, growing 29.5% YoY to ₹91,785 crore, driven by MSME lending and business banking.
• Wholesale Banking: Transformed into a diversified corporate book, growing 34.3% YoY to ₹56,313 crore. The Bank has reduced concentration risk, with top-20 single borrower exposure falling from 16% in March 2019 to just 5% in December 2025.
• Rural Finance: This segment saw a contraction of 6.8% YoY, primarily due to a strategic reduction in the micro-finance (MFI) book, which fell by 39.5% YoY to address industry-wide stress.
Core Growth Strategies and Business Model
The Bank’s core strategy centers on transforming from a wholesale-reliant institution to a retail-funded powerhouse. Pre-merger, the wholesale book comprised 86% of assets; as of December 31, 2025, the retail, rural, and MSME book constitutes 80% of the total portfolio. The business model is anchored by cash-flow-based lending, utilizing bank statements and GST filings for meticulous risk assessment.
Strategic Expansion and Liabilities Transformation
Strategic priorities have focused on stabilizing the liability side by growing retail deposits, which now account for 79% of total customer deposits, up from 27% at the merger. This shift has helped the Bank align its Cost of Funds (CoF) with mid-tier peer levels, reducing it by 169 bps from 7.8% at the merger to 6.11% in Q3 FY26.
Robust Capital Strength and Asset Quality
The Bank maintains a robust capital position with a Capital Adequacy Ratio (CRAR) of 16.22% and a CET-1 ratio of 14.23%. Asset quality remains strong, with Gross NPA at 1.69% and Net NPA at 0.53%. Notably, the Bank’s long-term credit rating is AA+ (stable) from all major rating agencies, including CRISIL, ICRA, and India Ratings.
Regulatory Milestones and Management Commentary
Created through the merger of IDFC Bank and Capital First on December 11, 2018, the institution was formed after receiving all requisite regulatory and legal approvals. Managing Director & CEO V. Vaidyanathan has emphasized a vision of a bank “guided by ethics, powered by technology, and to be a force for social good”. Under his leadership, the Bank turned profitable with an FY25 PAT of ₹1,525 crore, though Q3 FY26 profitability was temporarily impacted by the MFI crisis and the impact of the New Labour Code on operating expenses.
Shareholder Value and Growth Trajectory
Shareholder value has seen a steady rise, with the Book Value Per Share (BVPS) growing 74% from ₹31.4 in March 2021 to ₹54.73 in December 2025. Core operating profit for Q3 FY26 stood at ₹1,937 crore, an 11.6% YoY increase.
Future Outlook and Broader Industry Trends
The Bank targets a reduction in the Cost to Income (C:I) ratio over the next two years, aiming for approximately 65% for the overall bank by FY27, as it leverages digital capabilities and economies of scale. IDFC FIRST is also positioning itself as a leader in ESG (Environmental, Social, and Governance) trends, financing over 2.50 lakh EVs and raising over ₹970 crore in Green Deposits.