IDFC Bank credit costs to fall as provisions decline, CEO V Vaidyanathan says
Key Takeaways
- •IDFC Bank expects lower costs and provisions to continue supporting earnings this year.
- •The bank reported credit costs of 2.13% of loans, including the microfinance portfolio, compared with guidance of 2.10%.
- •CEO V Vaidyanathan said first-quarter credit quality trends encouraged the bank’s lower credit-cost target.
- •The bank is targeting a reduction in credit costs to about 1.5% to 1.6%.
IDFC Bank expects lower costs and provisions to continue supporting earnings this year, Managing Director and CEO V Vaidyanathan said.
Vaidyanathan said the bank’s credit cost stood at 2.13% of loans, including the microfinance portfolio, compared with guidance of 2.10%.
Credit cost is a measure of loan-loss provisions relative to the loan book, so a decline typically reduces the amount a bank must set aside for potential bad loans. For lenders with exposure to microfinance, trends in credit quality and provisioning are closely watched because they can materially affect profitability.
“Encouraged by seeing our credit quality in the first quarter, we are targeting 50 bps lesser credit cost, say 1.5% to 1.6%,” Vaidyanathan said.
The comments were made in an Economic Times Markets expert-view article published on July 26, 2026.