Federal Bank on Friday posted about 64 percent jump in net profit at Rs 600.66 crore for June quarter of financial year 202223. The private sector lender had logged a net profit of Rs 367.29 crore in yearago period.
Federal Bank on Friday reported a 63.5 percent jump in net profit at Rs 601 crore in the June quarter on a steep decline in money set aside for bad loans. The Kochi-based private sector lender had logged a net profit of Rs 367.29 crore in the year-ago period.
A CNBC-TV18 poll had estimated the profit to come in at Rs 477.9 crore.
Federal Bank managing director and chief executive Shyam Srinivasan attributed the same to reverses on the treasury operations side as the yields are going up, and added that the bank has tried to improve on other business parameters while trying to restrict the impact of the overall markets and rates movements on its investment book. The profit on sale of securities came at Rs 12 crore for the quarter under review as against Rs 394 crore a year ago, while the bank management said that the overall fee income came at Rs 441 crore as compared to Rs 255 crore in the preceding year.
The bank's total provisions more than halved to Rs 373 crore during the June quarter, majorly on the back of a reduction in the loan loss provisions which narrowed down to Rs 150 crore for the reporting quarter. From an asset quality perspective, the stock of gross non-performing assets came at 2.69 percent at the end of June. The same stood at 3.50 percent in the previous year and 2.80 percent three months ago.
The fresh slippages came at Rs 444 crore, with retail contributing a bulk Rs 204 crore. Srinivasan said the spurt in retail slippages is due to advances restructured earlier slipping into NPAs, and the bank is not concerned about it as it expected a fifth of such advances to slip.
He said that slippages from retail and also agriculture, which did not have any regulatory forbearance in the past, will be higher going forward. The bank expects the overall credit costs to come at between 0.40-0.50 percent for FY23, Srinivasan said.
He further said that it is aiming to maintain credit growth at the current level of about 16 percent, and will aim to get the NIM at 3.25 percent levels. The bank holds a 7 percent market share in the overall deposits mobilised by the Indian banking system and will aim to hold its share or increase it in the present set of deposit mobilisation push launched by the RBI as the rupee comes under pressure.
Its overall capital adequacy stood at 14.57 percent as against 15.77 percent three months ago, and 14.64 percent in the year-ago period.
Owned by ace investor Rakesh Jhunjhunwala, the share price of Federal Bank gained 1.44 percent to close at Rs 98.70 apiece on the BSE.
—With inputs from PTI
First Published: IST