Federal Bank Q1 net profit slips

Federal Bank has earned a net profit of Rs 131.86 crore in the first quarter of the current financial year as against Rs 136.38 crore in the same quarter of 2009-10, down by 3.31 per cent. The operating profit of the bank has increased to Rs 335.34 crore, against Rs 278.28, registering a growth of 20.51 per cent. The bank had reported a net profit of Rs 464.55 crore in 2009-10.

The bank attributed the lower net profit to higher provisioning of Rs 135.78 crore for loan loss as against Rs 93.23 crore in Q1 last year. Total business reached Rs 62,128 crore, showing an increase of 12.94 per cent from the corresponding period of the previous fiscal. Total deposits increased by 10.22 per cent from Rs 31,740.70 crore to Rs 34,983.85 crore. Net advances went up by 16.64 per cent to Rs 27,143.99 crore as on June 30, 2010 from Rs 23,270.81 crore.

The interest income for the first quarter increased by 8.85 per cent on a y-o-y basis to Rs 951.79 crore from Rs 874.38 crore as on June 30, 2009. However, other income for the quarter dipped to Rs 109.89 crore from Rs 147.41 crore, because of the reduction in the profit on sale of securities.

The total income for the first quarter increased by 3.90 per cent to Rs 1,061.68 crore. The interest expenses decreased by 7.84 per cent on a y-o-y basis. The net interest income for the first quarter recorded an impressive increase of 42.49 per cent from Rs 290.08 crore to Rs 413.32 crore by June-end.

Net NPA, return on average assets and capital adequacy ratio were at 0.74 per cent, 1.23 per cent and 17.89 per cent, respectively, as at the end of first quarter. These ratios were 0.29 per cent, 1.40 per cent and 19.11 per cent in the last comparable period.

The bank’s total number of branches and ATMs has increased to 708 and 751 respectively. The bank has an overseas representative office at Abu Dhabi in UAE. The bank has plans to expand rapidly during this financial year by opening around 100 branches and ATMs throughout the country.