<ul data-eligibleForWebStory="false"><li>UBS has initiated coverage on IDFC First Bank with a 'neutral' rating, citing challenges in return on asset (ROA) due to high credit costs and operational expenditures.</li><li>The bank, post-merger with Capital First, has shifted focus to a retail franchise but faces limited upside potential in ROA, despite growth in retail/CASA deposits.</li><li>UBS identifies 5 key factors including a neutral risk-reward outlook, sector tailwinds supporting growth, stable net interest margin (NIM) amid loan mix shifts, high credit costs, and forecasts of sustained stress in business loans.</li><li>Shares of IDFC First Bank have seen a 7% rally in one month and 20% year-to-date, with UBS projecting a modest ROA of 1% by FY27.</li></ul>

IDFC First Bank Shares In Focus After UBS Initiates Coverage With 'Neutral' Rating: 5 Key Factors

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