Federal Bank Q4 net up 163% to Rs 381 cr on interest margins, fee income

Gross NPAs as a percentage of gross advances, came down to 2.92% as of March 2019 from 3% in March 2018

Federal Bank’s net profit rose by 163.13 per cent to Rs 381.51 crore for the fourth quarter ended March on the back of better interest margins and robust other income. The lender had posted a net profit of Rs 145 crore in Q4FY18. The growth was on account of a significant rise in fee income, healthy growth of interest income and a drop in provisions over the year-ago quarter.

Net interest income, or the interest earned minus interest expended, was up 17.5 per cent to Rs 1,096.53 crore during the quarter under review, from Rs 933.22 crore in the March 2018 quarter, the bank said.

Other income for the three months ended March grew 31.05 per cent to Rs 411.72 crore, from Rs 314.17 crore a year ago. The lender's chief financial officer Ashutosh Khajuria said that the growth was mainly due to forex transactions and expanding customer relations.

Gross non-performing assets (NPAs), as a percentage of gross advances, came down to 2.92 per cent as of March 2019 from three per cent in March 2018.

Provisions and contingencies for the quarter stood at Rs 178 crore, a steep fall from Rs 371 crore a year ago.

The bank has an exposure of Rs 246 crore to Infrastructure Leasing & Financial Services (IL&FS), against which it has made a provision of Rs 21 crore and will be making an additional provision of Rs 4.8 crore. The bank management said it does not have any exposure to any other known stressed accounts the market is talking about, referring to customers such as Jet Airways and the Essel group.

Shyam Srinivasan, managing director and chief executive of the bank said the fourth quarter has been the ‘strongest quarter in terms of recovery’.  “The bank saw recoveries and upgrades of Rs 323 crore during the quarter. This was against new slippages of Rs 256 crore which have fallen from previous levels of Rs 400 crore,” he said adding that there was no sale to asset resticturing companies during the quarter.

The lender's total capital adequacy ratio stood at 14.14 per cent at the end of March 2019, against 14.7 per cent in March 2018.

Total deposits were up 20.50 per cent from Rs 1.12 trillion in March 2018 to Rs 1.35 trillion in March 2019.

Gross advances rose from Rs 93,172.6 crore in March 2018 to Rs 1.12 trillion in March 2019, up 20.02 per cent.