|
Federal Bank recorded strong 50% growth in the
net profit to Rs 460.26 crore in the quarter ended September 2021 (Q2FY2022),
driven by improvement in margins, acceleration in loan growth, stable asset quality
and decline in credit cost. However, the bank has witnessed increase in expense
ratio and decline in other income, restricting an increase in net profit in
Q2FY2022.
The Net Interest Margins (NIMs) improved to
3.20% in Q2FY2022 from 3.15% in the previous quarter. The advances growth of
the bank accelerated to 10%, while credit deposits ratio rose to 79.8% end
September 2021. The bank also exhibited an improvement in the asset quality
with the decline in fresh slippages of advances.
Asset
quality improves: Asset quality of the
bank improved in absolute terms as well as percentage terms in Q2FY2022.
Gross NPA ratio declined 4% on qoq basis to Rs
4445.84 crore, while Net NPA also fell 6% on qoq to Rs 1502.44 crore at end
September 2021.
Fresh slippages of advances declined to Rs 320
crore in Q2FY2022, while recoveries, upgradations, write-offs and NPA sales
were ahead at Rs 543 crore.
Fresh additions to GNPA were contributed by
retail segment at Rs 85 crore followed by agriculture at Rs 98 crore, business
banking at Rs 49 crore and commercial banking at Rs 88 crore, while slippages
were nil in the corporate segment in Q2FY2022.
The standard restructured advances book of the
bank stood at Rs 3553 crore at end September 2021, compared with Rs 2574 crore
a quarter ago and Rs 441 crore a year ago.
Provision coverage ratio improved to 65.4% at
end September 2021 compared to 65.0% a quarter ago and 64.7% a year ago.
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Asset Quality
Indicators: Federal Bank
|
|
|
Sep-21
|
Jun-21
|
Mar-21
|
Dec-20
|
Sep-20
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Variation
|
|
QoQ
|
YTD
|
YoY
|
|
Gross NPA (Rs Crore)
|
4445.84
|
4649.33
|
4602.39
|
3470.18
|
3552.19
|
-4
|
-3
|
25
|
|
Net NPA (Rs Crore)
|
1502.44
|
1593.24
|
1569.28
|
757.24
|
1218.14
|
-6
|
-4
|
23
|
|
% Gross NPA
|
3.24
|
3.50
|
3.41
|
2.71
|
2.84
|
-26
|
-17
|
40
|
|
% Net NPA
|
1.12
|
1.23
|
1.19
|
0.60
|
0.99
|
-11
|
-7
|
13
|
|
% PCR
|
65.43
|
65.00
|
65.14
|
77.10
|
64.65
|
43
|
29
|
78
|
|
% CRAR - Basel III
|
14.97
|
14.64
|
14.62
|
14.31
|
14.64
|
33
|
35
|
33
|
|
% CRAR - Tier I -
Basel III
|
14.09
|
13.87
|
13.85
|
13.00
|
13.33
|
22
|
24
|
76
|
|
Variation in basis
points for figures given in percentages and in % for figures in Rs crore
|
Business
Highlights:
Business
growth improves: Business growth of the
bank improved to 10% yoy at Rs 306399.38 crore at end September 2021. An
improvement in the business growth was mainly driven by acceleration in
advances growth to 9% yoy at Rs 134404.63 crore at end September 2021, while
the deposits growth also improved to 10% at Rs 171994.75 crore at end September
2021.
Strong
retail loan book growth:
Gross advances book increased 10% yoy to Rs 137313 crore at end September 2021,
as the retail book moved up 12% to Rs 44264 crore, while agriculture loan book
increased 20% to Rs 17890 crore and The business banking book expanded 10% to
Rs 12457 crore at end September 2021. The commercial banking book expanded 12%
to Rs 13851 crore and corporate banking book rose 4% to Rs 48851 crore end
September 2021.
Within the retail book, the mortgages jumped 11%
to Rs 7973 crore at end September 2021 from Rs 7206 crore at end September
2020. Housing increased 13% to Rs 20824 crore, auto 20% to Rs 3840 crore,
personal 6% to Rs 1736 crore, while other retail advances rose 9% to Rs 9892
crore at end September 2021.
CASA
ratio improves: CASA deposits of the
bank increased 18% at Rs 62191 crore gaining the share in overall deposits to 36.2% at end
September 2021 compared to 33.7% a year ago. Within the CASA, the saving
deposits increased at strong pace of 16% to Rs 51381 crore, while current
account deposits also galloped 28% to Rs 10810 crore at end September 2021.
Retail Deposits Ratio improved to 93.7% from 92.7% sequentially.
Network
expansion: Bank has network of 1272
branches and 1874 ATMs at end September 2021.
Book
Value per share stood at Rs
84.4 per share at end September 2021, while adjusted Book value (adjusting for
NNPA and 10% of restructured advances) was at Rs 75.5 per share at end
September 2021.
Quarterly Performance:
NII
improves on higher NIMs: Bank
has reported 7% growth in Net Interest Income (NII) at Rs 1479.42 crore for the
quarter ended September 2021. The interest earned declined -3% to Rs 3379.25
crore, while interest expended also dipped -10% to Rs 1899.83 crore in the
quarter ended September 2021.
Non-interest
income declines, on dip in treasury income: The non-interest income of the bank declined -1% to Rs 444.36
crore in Q2FY2022. Core fee income of the bank surged 26% to Rs 323 crore,
while treasury income dipped 50% to Rs 71 crore in Q2FY2022. Forex income improved
56% to Rs 50 crore in Q2FY2022.
Net total income increased 5% to Rs 1923.78
crore in the quarter ended September 2021.
Expense
ratio jumps: The operating expenses
of the bank surged 20% to Rs 1058.99 crore in the quarter ended September 2021.
Thus, the expense ratio moved up 679 bps yoy to 55.0% in the quarter ended
September 2021, causing -9% dip in the operating profit to Rs 864.79 crore in
Q2FY2022.
Provisions
dip: The provisions and
contingencies dipped -54% to Rs 159.20 crore in the quarter under review,
With the jump in provisions, PBT surged 49% to
Rs 619.46 crore. The effective tax rate was flat at 25.7% in Q2FY2022 compared
to 25.8% in Q4FY2020. Net Profit galloped 50% to Rs 460.26 crore in the quarter
ended September 2021.
Financial Performance H1FY2022:
For the halfyear ended ended September 2021
(H1FY2022), Bank posted 17% jump in the net profit at Rs 827.55 crore. The net
interest income rose 8% to Rs 2897.85 crore, while non-interest income moved up
6% to Rs 996.14 crore in H1FY2022. The operating expenses increased 15% to Rs
1992.39 crore, while provision and contingencies declined -15% to Rs 788.79
crore in H1FY2022. The profit before tax increased 17% to Rs 1112.81 crore in
H1FY2022. The expense ratio increased 320 bps to 51.2% in H1FY2022 compared to
48.0% in H1FY2021. After considering 25.6% of effective tax rate, the net
profit moved up 17% to Rs 827.55 crore in H1FY2022.
|
Federal Bank: Results
|
|
Particulars
|
2109 (3)
|
2009 (3)
|
Var %
|
2109 (6)
|
2009 (6)
|
Var %
|
2103 (12)
|
2003 (12)
|
Var %
|
|
Interest Earned
|
3379.25
|
3487.90
|
-3
|
6734.96
|
6932.05
|
-3
|
13757.91
|
13210.75
|
4
|
|
Interest Expended
|
1899.83
|
2108.05
|
-10
|
3837.11
|
4255.76
|
-10
|
8224.20
|
8561.85
|
-4
|
|
Net Interest Income
|
1479.42
|
1379.85
|
7
|
2897.85
|
2676.29
|
8
|
5533.71
|
4648.90
|
19
|
|
Other Income
|
444.36
|
449.36
|
-1
|
996.14
|
940.67
|
6
|
1852.69
|
1931.41
|
-4
|
|
Net Total Income
|
1923.78
|
1829.21
|
5
|
3893.99
|
3616.96
|
8
|
7386.40
|
6580.31
|
12
|
|
Operating Expenses
|
1058.99
|
882.65
|
20
|
1992.39
|
1735.08
|
15
|
3691.72
|
3375.61
|
9
|
|
Operating Profits
|
864.79
|
946.56
|
-9
|
1901.60
|
1881.88
|
1
|
3694.68
|
3204.70
|
15
|
|
Provisions & Contingencies
|
245.33
|
532.09
|
-54
|
788.79
|
929.65
|
-15
|
1557.41
|
1172.17
|
33
|
|
Profit Before Tax
|
619.46
|
414.47
|
49
|
1112.81
|
952.23
|
17
|
2137.27
|
2032.53
|
5
|
|
Provision for tax
|
159.20
|
106.85
|
49
|
285.26
|
243.84
|
17
|
546.97
|
489.75
|
12
|
|
PAT
|
460.26
|
307.62
|
50
|
827.55
|
708.39
|
17
|
1590.30
|
1542.78
|
3
|
|
EPS*(Rs)
|
8.8
|
5.9
|
|
7.9
|
6.7
|
|
7.6
|
7.3
|
|
|
* Annualized on current equity of
Rs 420.30 crore. Face Value: Rs 2, Figures in Rs crore
|
|
Source: Capitaline Corporate
Database
|
|