Federal Bank posts 25% rise in net profit on lower provisioning
Provisions and contingencies for Federal Bank fell 15.77% to Rs 199 crore in the quarter from Rs 236 crore a year ago
Mumbai: Federal Bank Ltd on Tuesday reported a 25% increase in its June quarter net profit due to lower provisioning and higher net interest income. Net profit for the quarter stood at Rs 262.71 crore against Rs 210.15 crore a year ago. According to 13 Bloomberg analysts’ estimates, the bank was expected to post a profit of Rs 211.70 crore.
Net interest income (NII), or the core income a bank earns by providing loans, was up 22.4% to Rs 980.06 crore from Rs 800.67 crore last year. Other income was at Rs 270.86 crore, down 17.7% from Rs 329.10 crore a year ago.
Provisions and contingencies fell 15.77% to Rs 199.15 crore in the quarter from Rs 236.44 crore a year ago. On a quarter-on-quarter basis, these declined 46.4% from Rs 371.53 crore.
Gross non-performing assets (NPAs) rose 53.58% to Rs 2,868.82 crore at the end of the June quarter from Rs 1,867.94 crore in the same quarter last year.
As a percentage of total loans, gross NPAs stood at 3% as compared to 3% in the previous quarter and 2.42% in the year-ago quarter. Net NPAs were at 1.72% in the June quarter compared to 1.69% in the previous quarter and 1.39% in the same quarter last year.
Federal Bank said it incurred mark-to-market losses of Rs 58.94 crore as of June 2018 and according to the Reserve Bank of India’s norm, it has exercised the option of spreading the provisions equally over four quarters. Accordingly, in the June quarter Rs 14.74 crore has been charged towards MTM losses and the balance of Rs 44.21 crore has been carried forward and will be amortised in remaining quarters, the bank said.
At 1.15 pm, Federal Bank shares were trading at Rs 83.05 on the BSE, up 12% from its previous close, while the benchmark Sensex gained 0.1% to 36,359.15 points.