Private sector lender Federal Bank on Monday reported 5 per cent year-on-year (y-o-y) and 10 per cent quarter-on-quarter (q-o-q) fall in net profit for the quarter ended December at ₹955 crore, largely due to higher provisions.
The bank’s total provisions including tax rose 43 per cent y-o-y to ₹614 crore in Q3, while operating expense was up 15 per cent at ₹1,778 crore. Fresh slippages rose to ₹486 crore in Q3 from ₹428 crore in Q2. Credit cost, or capital set aside for potential bad loans, rose sharply to 0.58 per cent from 0.30 per cent a quarter ago. Overall gross and net non-performing asset ratio (GNPA, NNPA) stood at 1.95 per cent and 0.49 per cent in Q3 as against 2.09 per cent and 0.57 per cent a quarter ago, respectively.
“In alignment with our commitment to building a robust foundation, we have undertaken accelerated provisioning for certain riskier asset classes this quarter. We remain steadfast in our focus on building a high-quality franchise that delivers value to all stakeholders whether through superior customer service and relationships, an enhanced employee proposition, or consistent and sustainable earnings quality,” said KVS Manian, MD, CEO at Federal Bank.
Federal Bank’s gross advances rose 15 per cent y-o-y to ₹2.33 lakh crore, while deposits were up 11 per cent y-o-y at ₹2.66 lakh crore. Net interest income of the bank rose 15 per cent on-year to ₹2,431 crore, while other income stood at ₹916 crore in Q3 as against ₹863 crore in corresponding period last year. Net interest margin of the bank was stable at 3.11 per cent in Q3. Capital adequacy ratio stood at 15.16 per cent in Q3.
