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Federal Bank

Capital Market/ 19:20 , Jul 16, 2014

Sharp fall in provisions lead to sharp rise in net profit

Kerala-based Federal Bank (FBL) is one of the leading old private sector banks. It has branches spread all over India.

June 2014 quarter results

Federal bank registered 7% rise in Interest income to Rs 1771.50 crore in the quarter ended June 2014.

A 6% rise in interest expenses to Rs 1207.28 crore saw net interest income (NII) grow 11% to Rs 564.22 crore.

Other income fell 27% to Rs 156.54 crore, which took net total income down 1% to Rs 720.76 crore.

Operating expenses increased 10% to Rs 369.23 crore, after which OP fell 10% to Rs 351.53 crore.

Provision and contingencies crashed 91% to Rs 22.08 crore after which PBT soared 112% to Rs 329.45 crore.

As tax expenses grew 119% to 109.22 crore, net profit increased 108% to Rs 220.23 crore.

Asset Quality

Asset quality continued to improve.

On a sequential basis, the Gross NPA of the Bank came down from Rs 1087 crore to Rs 1016 crore.

Gross NPA as a percentage to Gross Advances came down by 24 bps from 2.46% to 2.22%.

Net NPAs also fell sequentially from Rs 322 crore to Rs 304 crore during the quarter.

As a percentage Net NPAs decreased 6 bps from 0.74% to 0.68% on a sequential basis.

Even on a y-o-y basis, the Gross and Net NPA came down in absolute and percentage terms. Gross NPAs fell from Rs 1483 crore to Rs 1016 crore (3.51% to 2.22%, fall of 129 bps), while Net NPAs fell from Rs 374 crore to Rs 304 crore (0.91% to 0.68%, fall of 23 bps).

Provision Coverage Ratio

PCR (Provision Coverage Ratio) including written off assets improved from 83.00% to 84.92% on a YoY basis.

Business  

Total deposits increased 8.46% from Rs 56,995.66 crore to Rs 61,815.36 crore.

Advances increased 9.08% from Rs 41,263.05 crore to Rs 45,011.62 crore.

SME Advances registered a growth of 30% to reach Rs 11201.62 crore.

Investments stood at Rs 23,563.98 crore.

Return ratios

Return on Average Assets increased from 0.61 % to 1.22% during the quarter.

Return on Equity increased to 12.54% from 6.77%.

Cost to Income ratio stood at 51.23%.

CASA

Savings deposits grew by 14.73% to reach Rs 15,845.65 crore.

CASA ratio improved 179 bps from 28.96% to reach 30.75%.

CASA grew by 15.18% to reach Rs 19,008.31.

Net worth & Capital Adequacy Ratio

The Net Worth of the Bank increased to Rs. 7171.15 crore.

The Capital Adequacy Ratio (CRAR) of the Bank, computed as per Basel III guidelines, stands at a comfortable level of 15.16%.

The Tier-I (core CRAR) capital stood at 14.56 %.

Network expansion

The Bank continued to expand its footprint and added 29 branches and 33 ATMs during the quarter to take the tally to 1203 branches and 1392 ATMs as at June 30, 2014.

Valuation

The share price trades at Rs 125.

Federal bank: Results

 

1406 (3)1306 (3)Var. (%)1403 (12)1303 (12)Var. (%)
Interest Earned1771.501653.2676946.086167.5713
Interest Exp.1207.281143.6564717.474192.9113
NII564.22509.61112228.611974.6613
Other Inc.156.54215.79-27693.85664.444
Net Total Inc. 720.76725.4-12922.462639.111
Op.Exp.369.23334.86101442.071184.5422
OP351.53390.54-101480.391454.562
Prov. & Cont.22.08235.1-91268.4260.83
Profit Before Tax329.45155.441121211.991193.762
Tax109.2249.78119373.1355.595
PAT220.23105.66108838.89838.170
EPS*(Rs)10.34.99.89.8
* Annualized on current equity of Rs 171.07 crore.
Face Value: Rs 2 per share
Figures in crore
Source: Capitaline Databases

 



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