Thread on IDFC first Bank 🧵

Market cap: 37,087 crores
Revenues: 15,968 crores
P/E: 82
P/B: 2.42
ROE: 2.95%

Here we go 👇

1/25

Unique evolution,

On getting a license, it was created out of a demerger of infrastructure financing business followed by the merger of erstwhile Capital First;

Stress build-up and franchise investment resulted in a weak Return profile during the transition phase;

2/25

After merger of Capital First, with Mr. V. Vaidyanathan at the helm, management is focused on building a high-yielding retail banking franchise (average retail yield at >15%);

Infrastructure loans to be completely run down, selective lending in non-infra corporate segment:

3/25

Of the wholesale exposure, infra book has been almost halved since merger to Rs108bn and will be further rationalized to a very negligible proportion in 3-5 years;

4/25

Remarkable transition in asset and liability profile post the merger:

After having rolled out a 5-year strategic roadmap towards targeted RoA and RoE of 1.4-1.6% and 13-15% respectively, it has made significant strides on most operating parameters:-

5/25

@kunalb11 @GabbbarSingh IMO it is got to do with the nature of products & consumer behaviour. Most of the banks’ products are consultative sell rather an impulse buy at grocery stores. A customer has more chances of buying a shaving gel while buying milk than someone taking a car loan on a visit to ATM!

IDFC First Bank

Over the last 25 quarters number of retail shareholders with up to 2 lac share capital has grown by 200%+

Share price over the same period has been -20%

Median/Avg value of holdings has been approx ~Rs 28K for this set of shareholders

A thread 🧵about a bank whose 2nd name is "Consistency" and it's name is - CITY UNION BANK

Grab a cup of water and relax because it's gonna be a verryyyy long thread.

And don't forget to Re-tweet for wider reach.

HISTORY - City Union Bank is the oldest private sector bank in India, started in 1904 as Kumbakonam Bank in the Tamil Nadu as 'The Kumbakonam Bank Limited'.

It's amongst the very few banks that have survived for over 100 years and has remained profitable.

But before we get into the details about the bank, I wanna establish a base that how a bank works and what ratios one should look for.

So banking is a realllly simple business but at the same time it's not.

So the typical function of a bank is, they provide a place for people to keep their money and give that money to someone else. (It's simple right? You take money from one person and give that money to other person)

So how do they make money?

So why would a person deposit it's money in a bank?

Because 1st of all, you can't keep that much amount lying at your house and 2nd of all you get some interest on the money that you've deposited with them.