Kerala Based Federal Bank has reported modest increase in the Net profit by 36% to Rs 191.16 crore over marginal 8% increase in NII at Rs 474.41 crore and 6% dip in operating profit at Rs 361.27 crore in the quarter ended September 11. NIM has declined to 3.77% against 4.44% a year ago and 3.87% a quarter ago. Spike in the cost of funds coupled with dip in the non interest income by 19% to Rs 116.96 crore has led Net revenues to grow marginally 2% to Rs 591.37 crore. 30% dip in the total provisions at Rs 170.11 crore for lifted Net Profit up 36% on y-o-y basis.
For the quarter ended September 11, the Bank has reported marginal 8% increase in NII at Rs 474.41 crore. Interest earned inched up 40% to Rs 1367.83 crore on the back 36% jump of interest Rs 1050.05 crore and 52% jump in the income from investments at Rs 310.24 crore. However, average cost of funds inched up to 7.59% against 7.09% a quarter ago and 6.03% a year ago. Thus the interest expended moved at faster pace of 65% to Rs 893.42 crore.
The other income slipped 19% to Rs 116.96 crore owing to flat growth in the exchange, commission and brokerage income at Rs 31.35 crore, 6% dip in other fee income at Rs 30.33 crore and sharp 71% fall in the recovery at Rs 13.64 crore. Resultantly, Net revenues marginally inched 2% to Rs 591.37 crore.
The employee expenses of the bank has improved 6% to Rs 128.25 crore and other operating expenses by 33% to Rs 101.85 crore resulting operating expenses up by 17% to Rs 230.10 crore. Cost to income ratio has spurred up by whooping 500 bps to 38.9% and pulled down operating profit down by 6% to Rs 361.27 crore. However, sharp 58% dip in provisions and contingencies at Rs 72.19 crore came to rescue and led PBT up 35% to Rs 289.08 crore. The provisions on investment losses fell 12% to Rs 6.82 crore, provision for loan losses declined 60% to Rs 56.98 crore and other provisions fell 57% to Rs 8.39 crore. PBT was lifted up 35% to Rs 289.08 crore. Finally 70 bps dip in effective tax rate at 33.9% has resulted Net Profit up 36% to Rs 191.16 crore.
Half yearly Performance
For the half year ended September 11, the company has reported 24% increase in Net Profit at Rs 337.32 crore over 10% increase in NII at Rs 934.16 crore. Dip in the fee income by 8% to Rs 233.86 crore coupled with 390 bps increase in the cost to income ratio at 38.8% has tumbled operating profit down 1% to Rs 715.32 crore. Thanks to 16% dip in the total provisions, Net Profit was up 24% on y-o-y basis.
Federal Bank: Financial Results