Federal Bank today reported a 35.8 per cent fall in its net profit at Rs 141.39 crore for the first quarter of 2015-16.
The bank’s net profit stood at Rs 220.23 crore in the same quarter of the previous fiscal.
Total income of the bank increased to Rs 2,107.09 crore during the quarter under review, from Rs 1,928.04 crore in the year-ago period, Federal Bank said in a BSE filing.
Provisioning towards bad loans and contingencies were raised substantially to Rs 153.10 crore during the quarter as against Rs 22.08 crore set during the same period, a year ago.
The bank’s gross non-performing assets (NPAs) or bad loans rose to 2.59 per cent of gross advances during the quarter as against 2.22 per cent in the same period of the previous fiscal.
Net NPAs also increased to 0.98 per cent of net advances during the period under review, while it was at 0.68 per cent in the same period of the last fiscal.
Meanwhile in a separate release, Federal Bank said that it has got approval from the Reserve Bank for setting up a banking unit in the GIFT City of Gujarat.
“Federal Bank has obtained RBI permission for setting up International Financial Services Centre (IFSC) Banking Unit (IBU) in Gujarat International Finance Tec-City (GIFT City),” it said in a release.
A unit at GIFT City is equivalent to a foreign branch and hence facilitates the Bank to function as such from within the Indian shores, it said.
Once the IBU is opened, Federal Bank will be able to meet the funding requirements of overseas entities other than individual, retail customers, HNIs including the buyers of exporters from India, and undertake their transactions in currencies other than INR, it added.
The IFSC unit can also deal with the wholly-owned subsidiaries or joint ventures of Indian companies registered abroad.
Federal Bank accounts for nearly 9 per cent of the total NRI remittances to India.
It has a Representative Office at Abu Dhabi and has plans to open the second office in Dubai soon, said the release.
The Bank also has Rupee Drawing Arrangement with 6 Banks and 71 Exchange Houses.
“With the setting up of the IFSC Banking Unit in GIFT City, the Bank will now be able to cater to the needs of NRI clients around the globe in terms of meeting their overseas funding requirements,” it added.