Federal Bank reported 26.1% decline in net profit to Rs 307.62 crore on 8.7% increase in total income to Rs 3997.23 crore in Q2 September 2020 over Q2 September 2019.
Profit before tax stood at Rs 414.47 crore, sliding 11.25% compared with Rs 467 crore in the same period last year. Tax expense surged 112% to Rs 106.85 crore in Q2 September 2020 over Q2 September 2019.On the operational front, the bank's net interest income (NII) rose by 22.79% to Rs 1379.87 crore in Q2 September 2020 over Q2 September 2019. Net Interest Margin (NIM) improved to 3.13% in Q2 September 2020 from 3.01% in Q2 September 2019.
On asset quality front, Gross non-performing assets (NPAs) stood at Rs 3552.19 crore as on 30 September 2020 as against Rs 3655.59 crore as on 30 June 2020 and Rs 3612.11 crore as on 30 September 2019. The ratio of gross NPAs to gross advances stood at 2.84% on 30 September 2020 as against 2.96% as on 30 June 2020 and 3.07% as on 30 September 2019. The ratio of net NPAs to net advances stood at 0.99% as on 30 September 2020 as against 1.22% as on 30 June 2020 and 1.59% as on 30 September 2019.
The bank's provisions and contingencies increased by 135% to Rs 592.06 crore in Q2 September 2020 over Q2 September 2019. During the current quarter, as a prudent measure, the bank made an additional provision of Rs 401.61 crore against the further likely impact of COVID-19 pandemic. The aggregate provision against the likely impact of COVID-19, including the RBI mandated provision, stands at Rs 587.91 crore as on 30 September 2020.
Total advances grew from Rs 117622.36 crore to Rs 125208.57 crore. Total deposits increased from Rs 139546.52 crore as on 30 September 2019 to Rs 156747.39 crore as on 30 September 2020. CASA deposits clocked a growth of 20% Y-o-Y to reach Rs 52786 crore. Gold loans grew 54.02% reaching Rs 12,691 crore as on 30 September 2020.
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Commenting on the results and financial performance, Shyam Srinivasan, MD & CEO, Federal Bank said, "The Bank could deliver highest ever operating profit, which crossed Rs 1000 crore for the first time in the history of the Bank. Low risk and high yielding product like Gold Loan registered handsome growth. Net Interest Income registered robust growth, which helped improve NIMs as well. The Bank continues to weather the turbulences in the external environment by returning strong numbers for CASA and Asset Quality. As a prudent step and as part of strengthening the balance sheet, the Bank made standard asset provisions of Rs.402 Cr, taking the total to Rs. 588 Cr held as at end of Q2."
Shares of Federal Bank were up 2.61% at Rs 53.10. The scrip traded in the range of Rs 51.95 to Rs 53.3 so far during the day.
Federal Bank operates through four segments: treasury, corporate or wholesale banking, retail banking and other banking operations. The bank has 1271 branches and 1941 ATMs/recyclers as on 30 September 2020.
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