Federal Bank reported a 10.8 per cent year-on-year (Y-o-Y) increase in its net profit for the second quarter of the current financial year (Q2FY25), with profits rising to Rs 1,056.7 crore from Rs 954 crore in the corresponding quarter of the previous financial year.
The bank’s net interest income (NII) stood at Rs 2,367.3 crore, marking a 15 per cent growth from Rs 2,056.4 crore in the same period of the previous year. However, the net interest margin dropped to 3.12 per cent from 3.22 per cent during the quarter.
On the asset quality front, the gross non-performing asset ratio of the bank improved marginally to 2.09 per cent from 2.11 per cent in the previous quarter. Similarly, the net non-performing asset (NPA) ratio improved to 0.57 per cent from 0.6 per cent in the last quarter. The provision coverage ratio, excluding technical write-off, was 71.82 per cent.
The capital adequacy ratio (CRAR) of the bank, computed as per Basel III guidelines, stood at 15.20 per cent at the end of the quarter.
Total deposits increased from Rs 2.3 trillion in Q2FY24 to Rs 2.6 trillion as of September 30, 2024. On the asset side, net advances rose from Rs 1.9 trillion in Q2FY24 to Rs 2.3 trillion as of September 30, 2024. Retail advances grew by 17.24 per cent to reach Rs 72,701.75 crore. Business banking advances grew by 19.26 per cent to reach Rs 19,121.18 crore. Commercial banking advances grew by 24.34 per cent to Rs 24,493.35 crore. Corporate advances registered a growth of 10.48 per cent to reach Rs 77,953.84 crore. The commercial vehicle/construction equipment advances grew by 43.83 per cent to reach Rs 3,932.30 crore.
KVS Manian, managing director (MD) and chief executive officer (CEO) of Federal Bank, said, "Q2 has been robust for the bank, driven by strong momentum across diverse operational verticals. This is clearly reflected in our consecutive surpassing of the Rs 1,000 crore net profit milestone for two quarters in a row. Our deposits, now upgraded to AAA by CRISIL, signify a sturdy core of the franchise. Business momentum across verticals has been strong and inclusive, and asset quality improvements have been notable. We are committed to sustaining and building on this strong momentum to achieve continued success for the bank.”