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Federal Bank today said its net profit for the quarter ended June 30, 2014 more than doubled from a year earlier to Rs 220.2 crore as it cut provisions on the back of improving asset quality.
Net interest income, or the difference between interest income and interest expense, was up 10.7% from a year ago at Rs 564 crore during the quarter. Net interest margin was at 3.25%.
The bank's credit quality continued to improve with gross and net non-performing assets (NPAs) declining in both absolute and percentage terms. Gross NPAs fell to Rs 1,016 crore during the first three months of 2014-15 from Rs 1,483 crore a year earlier. Gross NPA ratio improved by 129 basis points, on a year-on-year basis, to 2.22% at the end of June, 2014. Net NPA ratio also decreased, by 23 basis points, from a year ago to 0.68% at the end of the quarter.
This allowed the bank to pare its provisions, which declined by 54% from a year ago to Rs 131.3 crore in April-June period. The provision coverage ratio, including written-off assets, was at 84.92%.
The bank's advances grew by 9.1% to Rs 45,011.6 crore at the end of June, 2014.
The growth in advances was driven by SME (small and medium enterprise) loans which were up 30%. Total deposits increased by 8.5% to Rs 61,815 crore. The share of low-cost current account savings account (CASA) deposits was at 30.75%.
FederalBank closed the quarter with a capital adequacy ratio of 15.16% as per Basel III rules. Tier I capital adequacy ratio of the bank was at 14.56%.
