Private lender on Saturday posted a net loss of Rs 630 crore at the end of the June quarter, with provisions more than doubling from the year-ago period. The lender had reported profits of Rs 93 crore a year ago. Net Interest Income grew by 25% YoY to Rs 2,185 crore, up from Rs 1,744 crore in Q1 FY21.

“Regarding the loss during the quarter, we have made prudent provisions for the second wave, and expect provisions to reduce for the rest of the three quarters in FY22,” said V Vaidyanathan, MD, IDFC First Bank. “We guide for achieving pre-Covid level Gross and Net NPA, with targeted credit loss of only 2% on our retail book by Q4 FY22 and onwards, assuming no further lockdowns.”

Total provisions and contingencies rose sharply to Rs 1,878 crore at the end of the quarter under review. This was at Rs 764 crore in the corresponding period last year.

The Covid provision pool increased from Rs 375 crore to Rs 725 crore during the current quarter, cushioning the potential impact on asset quality and bottom-lines in the future. The bank believes that the full estimated impact of the second wave is now provided for.

Gross bad loans also jumped significantly with the GNPA ratio coming at 4.61% versus 1.99% a year ago. Total quantum of bad loans rose sharply to Rs 4,667 crore at the end of the June quarter versus Rs 1,741 crore a year ago.

Net NPA ratio came at 2.32% versus 0.51% in the year ago period. The identified stress asset pool stood at Rs 1,371 crore as on June 30.

Fresh slippages also rose to Rs 2,800 crore, out of which Rs 1,800 crore came from the retail sector and Rs 850 crore came from a toll account which slipped in the June quarter.

“The vehicle segment, which includes the two-wheeler loans, used car and commercial vehicle loans, contributed to the slippages. We also saw fresh bad loans from the JLG-microfinance book,” Vaidyanathan said.