Federal Bank net profit jumps 29% to Rs 521.73 crore in Q3

The Provision Coverage Ratio (including technical write-offs) stood at 79.62%, as compared to 86.32% a year earlier.

federal bank
The lender had reported a net profit of Rs 404 crore in the third quarter of the last fiscal and Rs 460.26 crore in Q2 FY22.

Federal Bank on Tuesday reported a 29% year-on-year (y-o-y) increase in standalone net profit to Rs 521.73 crore for Q3 FY22, largely due to a reduction in provisions.

The lender had reported a net profit of Rs 404 crore in the third quarter of the last fiscal and Rs 460.26 crore in Q2 FY22.

Provisions and contingencies stood lower for the reported quarter at Rs 213.98 crore as against Rs 414.16 crore in the year-ago period. Fresh slippages were contained to Rs 442 crore along with recoveries and upgrade of Rs 491 crore, leading to an improvement in asset quality.

Gross non-performing assets (NPA) as a percentage of gross advances for Q3 FY22 were at 3.06% compared to 3.24% in the preceding quarter and 2.71% in the year-ago period.

Similarly, the net NPA ratio for the quarter stood at 1.05% as against 1.12% in Q2 FY22 and 0.60% in Q3 of FY21.

The Provision Coverage Ratio (including technical write-offs) stood at 79.62%, as compared to 86.32% a year earlier.

Shyam Srinivasan, MD & CEO of Federal Bank, said the bank’s credit quality remains top quartile on the back of disciplined lending practices.

“We are pleased to continue our strong performance with improvement across all parameters. The bank has delivered strong bottom line with key gains in Net Interest Income, fee income and Net Interest Margin. Net profit improved substantially registering a growth of 29% and it helped deliver RoA of 1%+,” he said.

He said the bank made a strong comeback in the corporate book in the third quarter and credit expansion took place quite meaningfully.

Total business grew 10.10% y-o-y from Rs 2,87,174.69 crore as on December 31, 2020, to Rs 3,16,174.33 crore as on December 31, 2021.The bank earned Net Interest Income of Rs 1,538.90 crore for the third quarter compared to Rs 1,437.04 crore as on December 31, 2020.

The Capital Adequacy Ratio (CRAR) of the bank computed as per Basel III guidelines stood at 14.37% at the end of the quarter.

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