Lower provisions drive Federal Bank Q4 net up 13% to Rs 541 cr

NIM of the lender rose 7.38% to Rs 1,525.21 crore in Q4FY22, from Rs 1,420.37 crore in the year-ago period

Private sector lender, Federal Bank, reported a 13.12 per cent jump in net profit in the January – March quarter, aided by lower provisions. Net profit in the quarter totaled to Rs 540.54 crore, the highest in a quarter, versus Rs 477.81 crore in the year-ago period.

Net interest income of the lender increased 7.38 per cent to Rs 1,525.21 crore in Q4FY22 compared to Rs 1,420.37 crore in the year-ago period. Other income of the lender dropped 2.6 per cent during the same period to Rs 465 crore. Net interest margin, a measure of profitability of banks, stood at 3.16 per cent, a drop of 11 basis points sequentially. The bank management said other income was impacted by lower treasury gains and loss on revaluations of security receipts.

The core fee income of the bank grew 25 per cent year-on-year to Rs 453 crore in Q4FY22.

Provisions of the lender dropped to Rs 75.24 crore in the reporting quarter compared to Rs 254.49 crore in the year-ago period. Asset quality of the lender improved with gross non-performing assets (NPAs) dropping 26 basis points to 2.80 per cent. Net NPAs reduced 9 basis points to 0.96 per cent.

Advances of the lender increased 9.46 per cent year-on-year to Rs 1.47 trillion, with retail advances growing at 6.08 per cent. Agri advances registered a growth of 19.93 per cent while business banking advances grew by 15 per cent. Commercial banking advances registered a growth of 12 per cent.