IDFC FIRST Bank Gets First Investment-Grade Rating

Rating Announcement

IDFC FIRST Bank announced on 14 August 2026 that S&P Global Ratings assigned it its inaugural international investment‑grade issuer credit ratings of ‘BBB‑’ for long‑term debt and ‘A‑3’ for short‑term debt, both accompanied by a Stable Outlook.

The rating was commented on by Mr. Sudhanshu Jain, Chief Financial Officer and Head of the Corporate Centre, who said the rating is an important milestone that will enhance the bank’s standing with global investors, support access to international funding markets, facilitate Standby Letter of Credit (SBLC) lines, strengthen foreign‑currency funding at the bank’s GIFT City International Banking Unit, aid mobilisation of FCNR(B) deposits, and deepen correspondent banking and cross‑border trade‑finance relationships.

S&P’s rationale highlighted that the bank is expected to maintain strong capitalization over the next 18‑24 months, with its Risk‑Adjusted Capital (RAC) ratio projected at 10.0‑10.5 %, underpinned by regular capital raising, improving profitability and a low dividend payout policy. The agency also noted the bank’s demonstrated ability to access equity markets and raise capital to support growth.

Profitability is projected to improve through healthy revenue growth, declining credit costs and better operating leverage, with the cost‑to‑income ratio expected to fall to 65‑70 % from 75 % in FY2026 over the next two years. Asset quality is expected to remain stable, supported by technology‑driven underwriting, portfolio diversification and a focus on lower‑risk lending segments.

The Stable Outlook reflects S&P’s expectation that the bank will retain strong capitalization, manageable asset‑quality risks and a granular retail‑funding profile for the next two years. The agency also highlighted the bank’s experienced management team, strong digital capabilities and a scalable retail banking franchise with nationwide reach.

Funding metrics show a CASA ratio of 50.8 % as of 30 June 2026, indicating a solid retail‑deposit base.

Overall, the investment‑grade rating is anticipated to strengthen the bank’s access to international markets and funding sources, support trade and SBLC lines, foreign‑currency funding, FCNR(B) deposit mobilisation, correspondent banking relationships and cross‑border trade‑finance activities.