Kochi/Mumbai: Kerala-based private lender Federal Bank Wednesday said its net profit has more than doubled to Rs 220.23 crore in three months to June on better asset quality and lower provisioning which came down by 54 percent in the quarter.
A major reason for lower provisioning was sale of bad assets to asset reconstruction companies which in the reporting quarter stood at Rs 141 crore. As a result, its provisions came down by 54 percent to Rs 131 crore from Rs 249 crore.
During the reporting quarter, the bank's net profit jumped 108.43 percent to Rs 220.23 crore from Rs 105.7 crore a year ago, the bank said.
On the reason for the sharp 27.5 percent fall in other income to Rs 156.5 crore, managing director and chief executive Shyam Srinivsasan told PTI that in the corresponding quarter last fiscal, the bank had a trading income of Rs 89 crore which more than halved to Rs 40 crore this quarter.
The bank had net interest margin of 3.25 percent in the quarter, up from 3.13 percent a year ago and Srinivasan expressed the hope that the bank will be able to maintain a NIM of 3.25-3.30 percent this fiscal.
He also expressed confidence of clocking a 15-20 percent growth in advances this fiscal and continuing to maintain asset quality.
Its core interest income, which is the interest income it earned on advances rose 7.15 percent to Rs 1,771.5 crore, while net interest income grew 10.72 percent to Rs 564.22 crore.
Gross NPAs, as a percentage to gross advances, came down by 24 bps from 2.46 percent to 2.22 percent, while net NPAs improved by 6 bps to 0.68 percent. In absolute terms, the gross NPA came down from Rs 1,087 crore to Rs 1,016 crore and net NPAs fell from Rs 322 crore to Rs 304 crore on a sequential basis. Despite this, Srinivasan said the bank increased its provision coverage ratio to 84.92 percent from 83 percent.
Srinivasan said the bank saw healthy growth in its retail, SME (over 30 percent growth) and mid-corporate lending, which helped the bank report a 3.63 percent growth in overall advances at Rs 45,012 crore, which in the corresponding period saw a degrowth.
During the quarter the bank recast bad loans worth Rs 88 crore, taking its total restructured book to Rs 2,752 crore.
Total income rose to Rs 1,928.04 crore in the quarter up 3.16 percent from Rs 1,869.05 crore a year ago.
Total deposits grew by 3.49 percent to Rs 61,815 crore from Rs 59,731 crore in the same period last year.
The bank intends to further consolidate its business position and improve its reach and customer base so that its non-core income grows faster, Srinivasan said, adding the bank, which embarked on a transformation journey, is well on its way to position itself as a national player with focus on SME and NRI clientele.
Capital adequacy ratio under Basel III stood at 15.16 percent.
The bank continued to expand its footprint and added 29 branches and 33 ATMs during the quarter to take the tally to 1,203 branches and 1,392 ATMs.
