Our asset quality has improved significantly, which is encouraging in the current stressful environment, said Federal Bank managing director and chief executive officer Shyam Srinivasan during a post-results call. We have sacrificed our growth for a better quality of loans, he added.
Federal Bank said that it had recoveries to the tune of R150 crore and the lender sold loans worth R186 crore to asset reconstruction companies during the third quarter. The October-December quarter at Federal Bank also saw fresh slippages to the tune of R146 crore, of which R42 crore were in the retail loan book and R59 crore in SME advances. Net interest margins (NIMs) at the bank were 3.24% for the October-December period, which was down 6 bps sequentially and 23 bps on a year-on-year basis. Srinivasan added that the lender would like to keep a blended NIM of 3.26% for the whole year. Advances increased by 5.43% to R41,639.96 crore from R39,494.03 crore a year ago. SME advances at the bank grew substantially by 38% y-o-y to reach R10,184 crore. The bank also reduced its dependence on large corporate advances an the portfolio recorded a degrowth of R1,805.75 crore.
Total deposits grew by 11.9% from a year ago to R57,737 crore. The share of low-cost current account savings account (Casa) deposits improved to 30.36% at the end of December, 2013.