Federal Bank posts 25% rise in net profit on lower provisioning
1 min read . Updated: 17 Jul 2018, 01:41 PM IST
PremiumProvisions and contingencies for Federal Bank fell 15.77% to ₹199 crore in the quarter from ₹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 ₹ 262.71 crore against ₹ 210.15 crore a year ago. According to 13 Bloomberg analysts’ estimates, the bank was expected to post a profit of ₹ 211.70 crore.
Net interest income (NII), or the core income a bank earns by providing loans, was up 22.4% to ₹ 980.06 crore from ₹ 800.67 crore last year. Other income was at ₹ 270.86 crore, down 17.7% from ₹ 329.10 crore a year ago.
Provisions and contingencies fell 15.77% to ₹ 199.15 crore in the quarter from ₹ 236.44 crore a year ago. On a quarter-on-quarter basis, these declined 46.4% from ₹ 371.53 crore.
Gross non-performing assets (NPAs) rose 53.58% to ₹ 2,868.82 crore at the end of the June quarter from ₹ 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 ₹ 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 ₹ 14.74 crore has been charged towards MTM losses and the balance of ₹ 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 ₹ 83.05 on the BSE, up 12% from its previous close, while the benchmark Sensex gained 0.1% to 36,359.15 points.
