Federal Bank Q2 Results: Profit Down 10% As Provisions Surges To More Than Twofold
Federal Bank Q2 provisions rose sharply to Rs 363 crore, a 129.7% increase from Rs 158 crore registered in the year-ago period.
Federal Bank reported profit for the September quarter declined due to higher provisioning expenses, even as key asset quality ratios showed improvement on a sequential basis.
The lender reported a 9.6% fall in net profit for the September quarter to Rs 955.26 crore, compared with Rs 1,056.69 crore in the previous quarter, according to its statement to the exchanges.
Net interest income declined 19.9% quarter-on-quarter to Rs 1,896 crore from Rs 2,367 crore. Provisions rose sharply to Rs 363 crore, a 129.7% increase from Rs 158 crore registered in the year-ago period.
Federal Bank Q2 Results (Standalone, YoY)
Net profit down 9.6% to Rs 955.26 crore versus Rs 1,056.69 crore
Net interest income down 19.9% to Rs 1,896 crore versus Rs 2,367 crore
Provisions up 129.7% to Rs 363 crore versus Rs 158 crore
Gross NPA at 1.83% versus 1.91% (QoQ)
Net NPA flat at 0.48% (QoQ)
Federal Bank's return on assets, on a non-annualised basis, came up to 0.27%, marking a slight increase from the previous quarter's 0.25%. The lender's return on equity, as per a press release, came up to 11.06% for the quarter under review.
Net advances also saw a 6% year-on-year increase, reaching Rs 2.44 lakh crore, while total deposits jumped over 7% in the same period to R. 2.89 lakh crore as on Sept. 30.
The company's net interest margin saw an uptick of 12 basis points, coming up to 3.06% in the September quarter versus the previous three months' 2.94%.
CASA ratio, on a sequential basis, rose to 31.01% from 30.35%.
"Our CASA franchise continues to demonstrate sustained and meaningful growth, reflecting the trust of our customers and the consistency of our team’s execution," KVS Manian, Managing Director and chief executive of Federal Bank said in the press release.
"We’re also broadening our asset mix thoughtfully, increasing the share of our mid-yield portfolio in a measured and disciplined way. At the same time, our fee income has seen strong, double-digit sequential growth, underscoring the breadth and resilience of our earnings," he added.
Federal Bank's board will also be meeting on Oct. 24 to mull a fundraise via share sale through a rights issue, preferential allotment or qualified institutional placement.
