Federal Bank Q2 net down 33% at Rs 240 cr

Other income declined by 7% to Rs 182 cr

Private sector lender Federal Bank has reported a 33 per cent decline in Net Profit to Rs 161 crore in the July-September quarter, compared with Rs 240 crore in the corresponding quarter of 2014-15 as its provisions doubled due to a spike in bad loans.

Net interest income, the difference between interest income and interest expenditure, remained flat and stood at Rs 608 crore, compared with Rs 606 crore in the third quarter of the last financial year.

Other income, which includes commission, fees, treasury gains etc also declined by 7 per cent in the quarter ended September to Rs 182 crore. The fall in other income was on account of losses made in treasury portfolio and also on sale of securities.

The asset quality was also under pressure with gross non-performing assets (NPAs), as percentage of total advances, increasing to at 2.90 per cent, compared with 2.10 per cent in the corresponding period a year ago. The net NPA ratio also fell to 1.33 per cent from 0.66 per cent in the September quarter last year.

As a result, provisions (other than tax) also almost doubled to 87.28 crore from Rs 45.71 crore in the same quarter a year ago. This rise in provision was mainly on account of loan loss provisions.

Net interest margin, a key indicator of bank's profitability, also slipped in this quarter to 3.11 per cent compared to 3.35 per cent in the same quarter a year ago.

At the end of the September quarter, net advances for the lender increased to Rs 50,867 crore from Rs 48,466 crore in the corresponding period last year. Total deposits increased to Rs 73,783 crore from Rs 64,564 crore in the same period.

The capital adequacy ratio of the banks stood at 14.71 per cent at the end of September quarter.