South-based private sector lender Federal Bank today reported a 6.42 per cent rise in September quarter net at Rs 240.30 crore, helped by a reduction in bad assets and better income.
The Kochi-headquartered bank had posted a post tax profit of Rs 225.81 crore in the corresponding period last year.
"It has been a fairly balanced growth with steady and stable numbers," Managing Director & Chief Executive Shyam Srinivasan told reporters on a call.
Core net interest income of the bank rose 10.48 per cent to Rs 605.80 crore, while other income raced up 36.58 per cent at Rs 195.86 crore for the reporting quarter, driven by a jump in fees arising out of credit growth, treasury gains, forex income and other fees, he said.
Srinivasan said changes in advance policies initiated two years ago, which had resulted in a slump in credit growth, are now paying dividends as the bank delivered a fifth straight quarter of a decline in gross non-performing assets ratio, which came down to 2.10 per cent.
He said this was not a result of any asset sale and added that this was possible because of a lower slippage at Rs 174 crore during the quarter.
On its exposure to Vijay Mallya's failed airline Kingfisher Airlines, Srinivasan said the bank is yet to label the liquor baron as a "wilful defaulter".
He said the bank is in discussions with the airliner and is exploring "all options" and added that it has recovered around 12 per cent of Rs 90 crore exposure till now.
During the quarter, it restructured Rs 68 crore of assets, taking the recast book to about Rs 2,500 crore.
Its provisions were up 49.83 per cent to Rs 169.46 crore and were attributed to an increase in provision coverage ratio (PCR) at 85 per cent by the bank management.
The bank's net interest margin widened to 3.35 per cent during the reporting quarter, but Srinivasan said the bank is targeting it to be in the 3.25-3.30 per cent range.
The share of the low cost current and savings account deposits stood at 30.56 per cent and the bank said it will hover around the same levels, even as it expands its network.
At a time when the industry is saddled with multi-year lows on credit growth, the bank registered a credit growth of 14.79 per cent on a year-on-year basis, Srinivasan said, adding it is targeting the same to be at 20 per cent for the fiscal.
The bank scrip shed 5.12 per cent to close at Rs 131.60 a piece on the BSE, as against the 1.33 per cent correction in the 30-share benchmark Sensex.
