The rates for deposits above ₹10 crore remains unchanged.
You can read more on that here.
Such a move is positive for the lender’s cost of funds.At 50.1%, IDFC First Bank’s CASA ratio is among the highest within the private banking space and comprises of 43% of the total deposits.
IDFC First’s cost of funds fell 19 basis points sequentially in the September quarter to 6.23%.During the second quarter earnings call, the management had highlighted that they will first focus on increasing deposits before cutting savings rates. Such a move also reflects the management’s confidence on deposit growth.
On the Credit-Deposit ratio, which is at 94%, the management had said that the plan is to bring it down to the mid-80s.
Brokerage firm Nomura had initiated coverage on IDFC First Bank on Wednesday with a “buy” rating and a price target of ₹105, implying a potential upside of 25% from current levels.
Analysts who CNBC-TV18 spoke to said that a 20 basis points reduction in savings account rates can result in an increase of up to seven basis points in IDFC First Bank’s Net Interest Margin and a near 5% increase in its Earnings Per Share (EPS) for financial year 2027.
Shares of IDFC First Bank are trading 2.1% higher after the announcement at ₹86.13. The stock is up 38% in the last 12 months.
