Federal Bank Ltd. reported the highest return on assets, a measure of profitability, in 20 quarters as its provisions fell and operating performance improved.
The private lender earned a return on assets of 1 percent—or generated Rs 1 income on every Rs 100 worth of assets—in the quarter ended March, according to its filings. That's the best reading since the quarter ended March 2014. India's banks reported an RoA of 0.56 percent on an average in the year ended March 2018, according to Bloomberg data.
What paid off Federal Bank is its focus to improve cost-to-income ratio, better net interest margin and lower credit costs.
The bank aims to increase its RoA by 10-12 basis points each year to 1.25 times in fiscal 2020-21 by improving credit cost, operating leverage and fee income.
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