Here's what triggered the sharp upmove in IDFC First Bank shares on Thursday

Shares of IDFC First Bank Ltd. gained as much as 2.5% on Thursday, January 8, after the lender cut its savings account rates across slabs.

For deposits below ₹10 crore, the rate of interest has been cut between 25 basis points to as high as 200 basis points.

The rates for deposits above ₹10 crore remains unchanged. You can read more on that here.

Such a move is positive for the lender's cost of funds.

At 50.1%, IDFC First Bank's CASA ratio is among the highest within the private banking space and comprises of 43% of the total deposits.

IDFC First's cost of funds fell 19 basis points sequentially in the September quarter to 6.23%.

During the second quarter earnings call, the management had highlighted that they will first focus on increasing deposits before cutting savings rates. Such a move also reflects the management's confidence on deposit growth.

On the Credit-Deposit ratio, which is at 94%, the management had said that the plan is to bring it down to the mid-80s.

Brokerage firm Nomura had initiated coverage on IDFC First Bank on Wednesday with a "buy" rating and a price target of ₹105, implying a potential upside of 25% from current levels.

Shares of IDFC First Bank are trading 2.1% higher after the announcement at ₹86.13. The stock is up 38% in the last 12 months.