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Business News/ Companies / Company-results/  Federal Bank Q4 net flat, core income falters
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Federal Bank Q4 net flat, core income falters

Federal Bank's March-quarter net profit rises marginally to `280.53 crore on dip in core income

Federal Bank’s overall income was up 9.77% at `2,214.28 crore for the March quarter of fiscal 2015. Photo: Pradeep Gaur/MintPremium
Federal Bank’s overall income was up 9.77% at `2,214.28 crore for the March quarter of fiscal 2015. Photo: Pradeep Gaur/Mint

Mumbai: South-focused private sector lender Federal Bank on Wednesday posted a marginal increase in net profit at 280.53 crore in March quarter of fiscal 2015 on dip in core income, but reported improvement in asset quality.

The Kerala-headquartered bank had registered a post-tax net of 277.29 crore in the year-ago period.

The overall income was up 9.77% at 2,214.28 crore for the reporting period. Its core net interest income came down 0.30% to 623.23 crore while a rise in treasury profits pushed up the other income 71.52% to 306 crore.

A dip in the fresh net slippages to 179 crore from the year ago quarter’s 212 crore, coupled with recoveries and upgrades of 121 crore, helped improve the gross non-performing assets ratio to 2.04% as against 2.46% in the year-ago period. This was largely due to a 3-year old strategy of the bank to stay away from problematic assets, its managing director and chief executive Shyam Srinivasan has said.

He added that in order to improve the quality of the book, the bank has had to face the challenge of restricting its growth. The provisions were up 32.13% to 188.62 crore during the reporting period.

The net interest margin improved 0.11% over the preceding quarter to 3.31%, and Srinivasan said it is targeting to maintain it in the 3.2-3.3% band. Its loan book grew 18% in FY15 and is expected to clock a growth of up to 21% in FY16, Srinivasan said.

The overall capital adequacy stood at a comfortable 15.46% at the end of March 2015 and there is no plan to raise fresh capital, he said, adding that the board has passed an enabling resolution to raise up to 2,000 crore from long-term bonds for infrastructure and affordable housing.

Srinivasan said the bank is not on the lookout for any acquisition, but may consider some select portfolios, but will concentrate on building its business organically.

The bank scrip closed 2.24% up at 130.15 on BSE as against the 0.62% correction in the benchmark.

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Published: 29 Apr 2015, 09:29 PM IST
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