Federal Bank Q1 net up 25.6% at Rs 210.15 cr on robust operations

There were only one or two large accounts that slipped during the quarter, in line with guidance

Federal Bank reported a 25.6 per cent rise in net profit during the quarter ended June 30, 2017, to Rs 210.15 crore, against Rs 167.31 crore in the year-ago period. The bank's total income rose to Rs 2,653.19 crore year-on-year (y-o-y) from Rs 2,263.84 crore.

Shyam Srinivasan, managing director & chief executive officer (CEO), Federal Bank, said the quarter saw one of the best operational performances. There were only one or two large accounts that slipped during the quarter, in line with the guidance.

"We are quite pleased with the outcome. It is a good operating performance... growth was strong at 29 per cent y-o-y on credit growth. CASA (current account, saving account), CD (credit-deposit) ratios and others have improved. We feel quite encouraged," he said.

The Kerala-based bank's gross net-performing assets (NPAs) stood at Rs 1,867.94 crore as against Rs 1,747.31 crore. As a per centage, it dropped to 2.42 per cent in Q1 from 2.92 per cent, in the year-ago period.

Net NPA rose to Rs 1,061.26 crore from Rs 994.450 crore. In per centage terms, it dropped to 1.39 per cent from 1.68 per cent, a year ago. The provision coverage ratio is 70.26 per cent.

One large steel account in the east worth Rs 109 crore has slipped during the quarter, which has increased the provision. However, this has been expected. Of the 12 large stressed accounts, for which the Reserve Bank of India (RBI) has brought in plans to resolve, Federal Bank had exposure to three accounts to the tune of Rs 180 crore, he said. However, the matter related to those three assets have been addressed, he added.

The bank's total business rose by 22.74 per cent to Rs 1,72,145.95 crore till Q1 of the financial year (FY) 2017-18. While deposits rose by 18.13 per cent to Rs 95,838.84 crore, advances grew by 29.08 per cent to Rs 76,307.11 crore in Q1 y-o-y.

CASA deposits rose by 20.33 per cent to reach Rs 32,048.03 crore y-o-y as per centage to total deposits increased to 33.44 per cent from 32.83 per cent during the corresponding period last year.

Net Interest income grew by 15.68 per cent to Rs 800.68 crore in Q1 from Rs 692.17 crore, a year ago. And, net Interest margin stood at 3.13 per cent in Q1FY18.

Bank's net worth y-o-y rose to Rs 11,541.90 crore in Q1 from Rs 8,093.29 crore. According to Basel III guidelines, capital adequacy ratio (CAR) stood at 15.28 per cent at the end of Q1. The bank raised Rs 2,500 crore through QIP during the quarter.