Federal Bank Q1 Results: Profit Falls 5.4% On Higher Provisions
The private lender's net profit fell 5.41% QoQ to Rs 854 crore, while on an annualised basis, it rose 42%.
Federal Bank Ltd.'s net profit declined 5.41% for the quarter-ended June, on the back of a sequential rise in provisions.
The private lender's net profit stood at Rs 854 crore, as compared with Rs 903 crore in the previous quarter, according to an exchange filing. On an annualised basis, net profit rose 42%.
Net interest income rose 19.6% from a year ago to Rs 1,919 crore. Other income rose 62% year-on-year to Rs 732 crore. Net interest margin fell to 3.15%, as of June 30, as against 3.31% a quarter ago.
The asset quality position of the lender weakened, with the gross non-performing asset ratio rising marginally to 2.38%. The net NPA ratio remained flat at 0.69%.
Provisions rose 33.4% quarter-on-quarter to Rs 155.6 crore.
Total advances increased by 21% from a year ago to Rs 1.83 lakh crore. The retail book portfolio grew 17% year-on-year. The lender's total deposits also grew 21% to Rs 2.22 lakh crore.
"There has been a strong start in Q1 with return ratios strong and growth broad-based. The credit quality continues to be strong and there is no significant deterioration in any portfolio," Shyam Srinivasan, managing director and chief executive officer at Federal Bank, told reporters over a conference call.
Earlier in June, Bloomberg reported that Federal Bank paused a stake sale in its non-banking financial unit, Fedbank Financial Services Ltd. This reportedly happened as the bank was unable to reach a consensus with prospective investors over the valuation of FedFina.
Responding to queries on stake sale, Srinivasan said, "The company filed a DRHP last year and is reconsidering options for raising capital this year. We hold 74% of the company and we will continue to be the majority shareholder."
