Federal Bank Q1 net profit rises 25% to `263 crore on NII boost

By: | Updated: July 18, 2018 2:52 AM

Federal Bank on Tuesday reported a 25% year-on-year (y-o-y) rise in net profit for the quarter ended June to rS 263 crore on the back of a 22.3% rise in net interest income (NII).

The bank’s net profit in the corresponding quarter in 2017-18 was Rs 210.15 crore.

Federal Bank on Tuesday reported a 25% year-on-year (y-o-y) rise in net profit for the quarter ended June to rS 263 crore on the back of a 22.3% rise in net interest income (NII).

NII is the difference between interest earned and interest paid by a bank.

The bank’s net profit in the corresponding quarter in 2017-18 was Rs 210.15 crore.

The net interest margin (NIM), a key measure of profitability, rose marginally to 3.12% from 3.11% in the end of March. Shyam Srinivasan, managing director and chief executive officer at the bank, guided for an NIM of 3.2% for the full year.
A release from the bank says that the total income increased to Rs 2,938.24 crore during the quarter from Rs 2,653.19 crore in the year-ago period. Interest income rose to Rs 2,667.38 crore from Rs 2,324.09 crore.

However, asset quality deteriorated, with gross non-performing assets (NPAs) surging to 3.42% from 2.42% as on June 30, 2017.

Provisions also fell 16% y-o-y to Rs 176.77 crore. The gross NPA ratio remained unchanged from the end of March at 3% of the loan book. The net NPA rose three basis points to 1.72%.

Fresh slippages dropped 47% sequentially to Rs 461 crore, of which Rs 207 crore came from the corporate book. The retail book saw slippages worth Rs 109 crore, up from Rs 70 crore in the March quarter, while those in the agri book fell to Rs 54 crore from Rs 56 crore in the previous quarter.

Slippages in the SME segment fell to Rs 90 crore from Rs 142 crore in Q4FY18.

Federal Bank’s standard restructured book shrunk to Rs 581 crore from Rs 792 crore at the end of the March quarter.

Srinivasan told a television channel that apart from Air India, there are no other chunky exposures in the bank’s standard restructured book.

Total advances grew 24% y-o-y to Rs 95,515 crore by the end of June. Retail loans grew 28%, corporate loans grew 32% and SME advances rose 18%. Srinivasan attributed the loan growth to gains in market share. “Not just smaller ones, I would say we have taken share even from bigger public-sector banks,” he added.

Low-cost current account savings account (CASA) deposits grew 16% y-o-y to Rs 37,234 crore and constituted 33.5% of all deposits as on June 30.

(With inputs from fe Bureau in Thiruvananthapuram)

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