Credit Rating- New

IDFCFIRSTBANK/SD/116/2026-27 August 13, 2026 National Stock Exchange of India Limited BSE Limited Mumbai 400 051 Mumbai 400 001 NSE Symbol: IDFCFIRSTB BSE Scrip Code: 539437 Sub: Disclosure under Regulation 30 of the SEBI (LODR) Regulations, 2015. Re: IDFC FIRST Bank receives Investment Grade rating from S&P Global Ratings with Stable Outlook. Dear Sir/ Madam, We are pleased to inform you that S&P Global Ratings today assigned 'BBB-' long-term and 'A-3' short-term issuer credit ratings to IDFC FIRST Bank. The outlook on the long-term rating is stable. The rating is an Investment Grade Rating under the international rating scale. S&P Outlook mentions “The stable outlook on the long-term rating reflects our view that IDFC First Bank will maintain strong capitalization with a RAC ratio of more than 10% in the next two years. We believe risks to the bank's asset quality will stay manageable, supported by adequate underwriting standards. We expect the bank's funding to continue to benefit from a granular retail deposit base.” The rating report also mentions rationale as follows “Since the 2018 merger between IDFC Bank and Capital First Ltd. that created IDFC First Bank, the lender has transitioned from a wholesale-dependent funding model to a granular, retail-led deposit franchise. As of March 31, 2026, core deposits comprised approximately 89% of the bank's total funding base, with retail deposits accounting for nearly 80% of total deposits. Underpinning this structural shift is a robust current account and savings account ratio of 50.8% (as of June 30, 2026), which remains above the industry average. While this comes at a higher cost compared with peers, it improves granularity of the bank's deposit base. The bank's deposit concentration--measured by the share of the top 20 depositors in total deposits--declined to 9.4% as of March 31, 2026. This is comparable with similar-size peers, although higher than larger banks in India (4%-5% of total deposits).” A detailed Rating Rationale issued by S&P Global Ratings is enclosed herewith. Yours faithfully, For IDFC FIRST Bank Limited Satish Gaikwad General Counsel and Company Secretary IDFC FIRST Bank Limited Corporate Office: IDFC FIRST Bank Tower, (The Square), C-61, G Block, Bandra-Kurla Complex, Bandra (East), Mumbai - 400 051, Maharashtra. Tel: +91 22 7132 5500 Registered Office: KRM Tower, 7th Floor, No. 1, Harrington Road, Chetpet, Chennai 600 031, Tamil Nadu. Tel: +91 44 4571 6477 CIN: L65110TN2014PLC097792 | E-mail: bank.info@idfcfirstbank.com; | Website: www.idfcfirst.bank.in Research Update: IDFC First Bank Assigned 'BBB-/A-3' Ratings; Outlook Stable August 13, 2026 Primary Contact Overview Nikita Anand • IDFC First Bank's capitalization is likely to stay strong over the next 18-24 months, thanks to Singapore fresh equity injections and improving profitability. 65-6216-1050 nikita.anand • The bank's adequate underwriting standards and strong digital capabilities underpin its @spglobal.com business stability and creditworthiness, while a modest market share tempers these strengths. Secondary Contact • We assigned our 'BBB-' long-term and 'A-3' short-term issuer credit ratings to IDFC First Bank. Deepali V Seth Chhabria Mumbai • The stable outlook on the long-term rating reflects our view that the India-based bank will 912261373187 maintain its financial strength over the next two years. deepali.seth @spglobal.com Rating Action Secondary Contact On Aug. 13, 2026, S&P Global Ratings assigned its 'BBB-' long-term and 'A-3' short-term issuer Aurick Soh credit ratings to IDFC First Bank. The outlook on the long-term rating is stable. Singapore 65-6216-1134 aurick.soh Rationale @spglobal.com IDFC First Bank will maintain strong capitalization over the next 18-24 months, in our view. We forecast the bank's risk-adjusted capital (RAC) ratio will stay at 10.0%-10.5%, compared with 10.9% as of March 2026. The bank’s loan book is likely to grow at 20% per annum over that period, faster than the wider Indian banking industry. Regular capital raisings, improved profitability, and a low dividend payout should support IDFC First Bank's capitalization. The bank has demonstrated good access to equity markets, raising capital frequently since fiscal 2021. We expect IDFC First Bank to raise additional capital of up to Indian rupee (INR) 75 billion in fiscal 2027 (ending March 31, 2027) and to conduct further equity infusions as needed to support its growth plans. Management aims to maintain an S&P Global Ratings RAC ratio above 10% on a sustained basis. www.spglobal.com/ratingsdirect August 13, 2026 1 IDFC First Bank Assigned 'BBB-/A-3' Ratings; Outlook Stable We forecast IDFC First Bank's net interest margin will improve by 5 basis points (bps)-10 bps in fiscal 2027 and then stabilize. The bank has by far the highest net interest margins among Indian banks we rate. This is due to a larger share of higher yielding products in its portfolio, such as unsecured retail loans, microfinance, two-wheeler loans, and loans provided for the purchase of consumer durables. Future healthy growth in relatively low yielding corporate loans should balance out the effect of growth in the high yielding microfinance book on the bank's net interest margin. We expect IDFC First Bank's cost-to-income ratio and credit costs to decline, improving the bank's profitability over the next two years. During this period, we forecast it will have a ratio of core earnings to average adjusted assets of 1.0%-1.2% (1.1% annualized for the first quarter of fiscal 2027). This level is comparable with those of regional peers and the sector average in India, although lower than those of larger private-sector banks. Sustainable improvement in IDFC First Bank's profitability will hinge on lowering its cost-to- income ratio. In our view, investment in branches, employees, and technology has kept the bank's operating expenses higher than those of peers, weighing on its profitability (return on average assets of 0.7% on average over fiscal 2022-2026). As newer businesses and branches generate higher returns, income growth should continue to significantly outpace operating expense growth. IDFC First Bank's cost-to-income ratio could improve to 65%-70% over the next two years, compared with 75% in fiscal 2026 as the bank scales up. Growth in operating expenses should be lower than previous years as major investments in technology and branches taper off. IDFC First Bank's asset quality should stay stable. We expect the bank's nonperforming loans ratio to be range bound at 1.7%-1.8% of total loans and its credit costs to be 1.5%-1.6% of total loans over the next two years. The bank's risk position is characterized by stabilizing asset quality and declining credit costs (1.6% in the first quarter of 2027 compared with 2.1% in fiscal 2026) following previous microfinance and infrastructure stress. While the bank maintains sizable exposure to higher-yield, riskier segments, mitigating these are tech-driven underwriting, high government guarantee coverage on microfinance loans, and a diversified portfolio that is gradually pivoting toward lower-risk segments. Nonetheless, the bank’s credit costs are likely to stay higher than our forecast for the sector average of 0.8%-1.0% of loans over the next two years. Even after adjusting for the credit costs, the bank’s margins should stay stronger than the sector. IDFC First Bank is likely to expand the share of its loan portfolio for corporate lending, which we expect will grow faster than other sectors. Additionally, the microfinance portion of its portfolio could rebound after two years of decline, although it will likely remain below 5% of the total mix. IDFC First Bank targets higher growth in lower credit cost segments, such as prime mortgages, loans against property, and safer commercial vehicle segments like large fleet operators if the risk-reward balance is good. We believe the bank has adequate provision coverage [Showing first 8,000 characters — download PDF for full document]