Reducing the cost of deposits and increase in non-interest income has helped Federal Bank to almost double its net profit for the third quarter, bank sources said here on Friday while announcing the unaudited results for Q3.
The net profit for Q3 is Rs 203.89 crore, up by 98.11 % y-o-y over the net profit of Rs 102.92 crore for the third quarter of last year. The net profit of the bank for the nine months ended December 2008 stands at Rs 386.32 crore, up by 45.68 % over the figure of Rs 265.19 crore clocked during the corresponding period of the previous year. Total income for the nine-month period increased from Rs 2068.37 crore to Rs 2814.87 crore, showing an increase of 36.09%, supported by a 19.65% growth in overall business. Total business of the bank increased to Rs 48,811 crore, showing an increase of 19.65% from the corresponding period of the previous fiscal. Total deposits increased by 16.81% to Rs 27,258 crore by end of December 2008.
A conscious effort to retire high cost deposits, improved balance in the current and savings account and a higher credit-deposit ratio has helped the bank increase its net -interest margin for the three quarters of the current FY to 4.41% from 3.36% of the comparable period of last FY.
For the first three quarters of 2008-09, interest income from advances and investments grew by 45.21% and 17.14% respectively, on a y-o-y basis supported by strong asset growth.
The net interest income (net of interest earned less interest expenses) for the nine months period showed a growth of 67.16% over the corresponding period of the previous fiscal. The non-interest income, during the nine months period could report a growth of 35.21% to Rs 365.23 crore, supported by fee & commission income, remittance business, depository business and recovery of written off loan accounts. For the 3 months ended December 2008, the y-o-y growth in non-interest income was 94.01%.