Federal Bank posts 40% y-o-y growth in Q1FY24 net profit

14 Jul 2023 , 10:59 AM

Federal Bank reported a more than 40% y-o-y increase in its June quarter net profit to Rs 854 crore, owing to lower provisions and improved business momentum. In the same quarter of the previous fiscal year, the bank clocked a net profit of Rs 601 crore.

Net interest income of the bank grew by 20% to Rs 1,919 crore in Q1FY24, against Rs 1,605 crore in the previous corresponding quarter. The net interest margin came in at 3.15%, down by 7 basis points on a year-on-year basis due to an increase in the cost of funds.

Federal Bank’s MD Shyam Srinivasan believes that FY24 kick-started with robust numbers, and the bank could witness encouraging business growth both on assets and liabilities.

In the June quarter, the cost-to-income ratio was 50.87%, which was higher sequentially due to ECL (expected credit loss) provisioning and an increase in technology spending.

Further, the management also indicated that it is looking to raise Rs 4,000 crore in the current financial year and is under negotiation with many prospective investors.

Loans increased by 21% year-on-year to 1.86 lakh crore, with corporate loans increasing by 22%, retail loans increasing by 18.8%, and SME loans increasing by more than 17%. Deposits increased by 21.3% year-on-year to 2.22 lakh crore.

The bank’s gross non-performing loan ratio was reported at 2.38% for June 2023 quarter, down from 2.69% in the previous corresponding quarter. The net NPA stood at 0.69%.

At around 10.52 AM, Federal Bank was trading at Rs 126.80, against the previous close of Rs 126.75 on NSE.

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