Federal Bank Q2 result: Marginally up profit reported at Rs 266 crore

By: | Published: October 17, 2018 12:16 AM

Federal Bank on Tuesday reported a marginal, 0.88% rise in its net profit for the second quarter of FY19 at Rs 266 crore, restricted by an increase in provisions as dud assets increased.

Federal Bank Q2 profit up marginally

Federal Bank on Tuesday reported a marginal, 0.88% rise in its net profit for the second quarter of FY19 at Rs 266 crore, restricted by an increase in provisions as dud assets increased.

The South-based lender had posted a net profit of Rs 263.70 crore in the year-ago quarter.Provisions jumped 63.38% to Rs 288.82 crore during the quarter from Rs 176.77 crore a year ago. On a sequential basis, provisions surged 45.03% from Rs 199.15 crore.

Net interest income (NII), the core income a bank earns by giving loans, increased by 13.75% y-o-y to `1022.47 crore against `898.91 crore in the previous year.

The lender’s asset quality during the quarter slipped slightly. Gross non-performing assets (NPAs) increased by 63.42% to `3184.53 crore at the end of the September quarter from `1948.97 crore in the same quarter last year. Gross NPAs stood at 3.11% as compared to 2.39% in the year-ago quarter. Net NPAs stood at1.78% against 1.32% a year ago.

Speaking to reporters after the release of earnings, managing director and chief executive officer Shyam Srinivasan confirmed that the lender has restructured loans worth `35 crore on account of Kerala floods in Q2. “Expect some more restructuring on account of Kerala floods in Q3 & net interest margin to go up to 3.20-3.25% level in coming quarters,” he said.

The bank experienced healthy growth in lending — the advances for the quarter grew 25.17% to `1.01 lakh crore, while the deposits recorded a 21.6% y-o-y growth to `1.18 lakh crore.

After the results turned out to be better than what experts predicted, shares of the bank surged 7.86%.

The bank registered operating profit of `697.60 crore for the quarter, an increase of 19.62% over the corresponding quarter last year. The operating and net profits for six months to September 30 stood at `1,300.52 crore and `528.75 crore respectively. NRE deposits of the bank grew from `38,255.82 crore to `46,787.05 crore, registering a growth of 22.30%.

(With inputs from FE bureau in Kochi)

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