Federal profit up 18%

To Rs 167.3 crore in the April-June quarter aided by higher other income growth

Private sector lender Federal Bank has reported an 18 per cent growth in net profit to Rs 167.3 crore  in the April-June quarter, aided by other income growth.

Net interest income, difference between the revenue generated from a bank’s assets (loans) and the expenses associated with paying out its liabilities (customer deposits), improved 14.5 per cent to Rs 692 crore. Other income that included income from fees, commission, grew 22.5 per cent to Rs 237.5 crore in the quarter ended June as compared to Rs 194 crore in the corresponding quarter last year. The strong gains in other income were led by higher treasury gains.

The lender has managed to keep a check on its asset quality as gross non-performing assets increased to 2.92 per cent as compared to 2.84 per cent in the quarter ended March.

On a sequential basis, Net NPA also increased  to 1.68 per cent as compared to 1.64 per cent. The bank said that its loan loss provisions and credit cost has reduced by more than 50 per cent to Rs 126.78 crore  and 0.86 per cenr, sequentially.

At the end of the March quarter the management had stated that they expected the NPA trajectory to improve going further.

Total advances increased by 19.30 per cent out of while SME advances grew by 17.79 per cent, the large corporate advances improved by 36.77 per cent. On the other hand deposits increased by 12.47 per cent.

Net interest margin, a key indicator of bank’s profitability, was at 3.28 per cent. The lender remains well capitalised with a capital adequacy ratio of  13.59 per cent.