Federal Bank on Saturday reported a 96% year-on-year fall in its net profit for the March quarter.
Federal Bank on Saturday reported a 96% year-on-year fall in its net profit for the March quarter.In a post-results interaction, MD Shyam Srinivasan talks about why bank’s provisions skyrocketed, how the quarter gone by fared and what is in store for this fiscal. Excerpts….
How would you summarize this quarter and the fiscal year gone by?
Well, to summarise, our operating profit was good. Our operating performance was good, or encouraging. And Q4 particularly and FY16 in general were impacted significantly by provisions.
Federal Bank’s provisions this quarter were more than double over the same quarter last year. Can you give us a break up of that?
Around Rs 250 crore out of the total Rs 384 crore of provisions pertained to event-specific cases that is state discoms, Food Corporation of India, etc. It also consists of the impact of provisioning for accounts that had slipped earlier or restructured accounts that failed restructuring.
How do you see FY17 panning out ?
We see ourselves entering FY17 with a better operating run rate, with most of the large credit issues addressed. We don’t have any names from the “House of debt” issues. Our restructured book has come down by almost 25%.
How large is your restructured book now and how much do restructured assets and NPAs account for in terms of your overall loan book? Also, do you have a watch-list for stressed accounts?
We don’t have a watch list. As I said, we have a very miniscule amount of exposure to the so called House of debt accounts. Our restructured book is currently Rs 1,592 crore and gross NPAs are around Rs 1,667 crore.