|
Federal Bank recorded 13% growth in the net
profit to Rs 540.54 crore in the quarter ended March 2022 (Q4FY2022), driven by
decline in loan loss provisions. However, the bank has witnessed 10% decline in
the operating profit due to surge in operating expense on account of one-off
upfront provisioning for employee family pension benefit in Q4FY2022. The bank
has also witnessed moderation in loan growth to 7% end March 2022. The
narrowing of Net Interest Margins (NIMs) in Q4FY2022 over Q4FY2021 impacted the
Net Interest Income (NII) of the bank, while the non-interest income of the
bank was flat due to dip in treasury income in Q4FY2022.
On the other hand, the bank has improved asset
quality. The bank also improved CASA deposit ratio to 36.9% end March 2022. The
fee income of the bank has increased strong pace of 19% in Q4FY2022.
Asset
quality improves: Asset quality of the
bank improved sharply, in absolute terms as well as percentage terms in
Q4FY2022.
Gross NPA has declined 10% on yoy basis to Rs 4136.74
crore, while Net NPA dipped 11% on yoy to Rs 1392.62 crore at end March 2022.
Fresh slippages of advances was at Rs 358 crore
in Q4FY2022, while recoveries, upgradations, write-offs and NPA sales were higher
at Rs 663 crore.
Fresh additions to GNPA were contributed by retail
segment at Rs 86 crore followed by agriculture at Rs 147 business banking at Rs
68 crore and commercial banking at Rs 56
crore. The slippages from corporate were nil in Q4FY2022.
The standard restructured advances book of the
bank stood at Rs 3536 crore at end March 2022, compared with Rs 3723 crore a
quarter ago and Rs 1618 crore a year ago.
Provision coverage ratio was steady at 65.5% at
end March 2022 compared to 65.8% a quarter ago and 65.1% a year ago.
|
Asset Quality
Indicators: Federal Bank
|
|
|
Mar-22
|
Dec-21
|
Sep-21
|
Jun-21
|
Mar-21
|
Variation
|
|
QoQ
|
YoY
|
|
Gross NPA (Rs Crore)
|
4136.74
|
4401.26
|
4445.84
|
4649.33
|
4602.39
|
-6
|
-10
|
|
Net NPA (Rs Crore)
|
1392.62
|
1471.18
|
1502.44
|
1593.24
|
1569.28
|
-5
|
-11
|
|
% Gross NPA
|
2.80
|
3.06
|
3.24
|
3.50
|
3.41
|
-26
|
-61
|
|
% Net NPA
|
0.96
|
1.05
|
1.12
|
1.23
|
1.19
|
-9
|
-23
|
|
% PCR
|
65.54
|
65.80
|
65.43
|
65.00
|
65.14
|
-26
|
40
|
|
% CRAR - Basel III
|
15.77
|
14.37
|
14.97
|
14.64
|
14.62
|
140
|
115
|
|
% CRAR - Tier I -
Basel III
|
14.43
|
13.52
|
14.09
|
13.87
|
13.85
|
91
|
58
|
|
Variation in basis
points for figures given in percentages and in % for figures in Rs crore
|
Business
Highlights:
Business
growth slows: Business growth of the
bank moderated to 7% yoy at Rs 329340 crore at end March 2022. The moderation
in business growth was mainly driven by deceleration in advances growth to 9% yoy
at Rs 147639 crore at end March 2022, while the deposits growth eased to 5% at
Rs 181701 crore at end March 2022.
Strong
non-corporate loan growth:
Gross advances book increased 9% yoy to Rs 147639 crore at end March 2022, as
the retail book moved up 6% to Rs 47593 crore, while agriculture loan book
increased 20% to Rs 19238 crore and The business banking book expanded 15% to
Rs 13869 crore at end March 2022. The commercial banking book rose 12% to Rs 14806
crore and corporate banking book increased 7% to Rs 52133 crore end March 2022.
Within the retail book, the mortgages jumped 8% to
Rs 8453 crore at end March 2022 from Rs 7852 crore at end December 2020. Housing
increased 2% to Rs 20428 crore, auto 17% to Rs 4229 crore, other retail
advances 10% to Rs 12732 crore, while personal loan book declined 3% to Rs 1751
crore at end March 2022.
CASA
ratio improves: CASA deposits of the
bank increased 15% at Rs 67121 crore gaining the share in overall deposits to 36.9% at end March
2022 compared to 33.8% a year ago. Within the CASA, the saving deposits
increased at strong pace of 14% to Rs 54510 crore, while current account
deposits galloped 18% to Rs 12612 crore at end March 2022. Retail Deposits
Ratio improved to 94.4% from 93.7% sequentially.
Net
interest margin (NIM) of
the declined to 3.16% in Q4FY2022
from 3.27% in the previous quarter and 3.23% in the corresponding quarter last
year. The yield on advances declined 12 bps qoq to 7.92% and cost of funds rose
1 bp to 4.28% in Q4FY2022.
Network
expansion: Bank expanded its
footprint and added 8 branches and 3 ATMs during the quarter to take the tally
to 1282 branches and 1885 ATMs at end March 2022.
Book
Value per share stood at Rs 89.4
per share at end March 2022, while adjusted Book value (adjusting for NNPA and
10% of restructured advances) was at Rs 81.1 per share at end March 2022.
Quarterly Performance:
Slow
NII growth on narrowing of NIMs: Bank has reported 7% growth in Net Interest Income (NII) at Rs 1525.21
crore for the quarter ended March 2022. The interest earned rose 3% to Rs 3483.24
crore, while interest expended also moved up 1% to Rs 1958.03 crore in the
quarter ended March 2022.
Treasury
income dip, fee income jumps: The non-interest income of the bank was flat at Rs 465 crore in
Q4FY2022. Core fee income of the bank surged 19% to Rs 385 crore, while treasury
income dipped 90% to Rs 12 crore in Q4FY2022. Forex income jumped 70% to Rs 68 crore
in Q4FY2022.
Net total income increased 6% to Rs 1990.21 crore
in the quarter ended March 2022.
Expense
ratio jumps: The operating expenses
of the bank surged 19% to Rs 1192.01 crore in the quarter ended March 2022. Thus,
the expense ratio moved up 683 bps yoy to 59.9% in the quarter ended March
2022, causing 10% dip in the operating profit to Rs 798.20 crore in Q4FY2022.
Provisions
dip: The provisions and
contingencies dipped 69% to Rs 182.42 crore in the quarter under review.
With the jump in provisions, PBT moved up 12% to
Rs 722.96 crore. The effective tax rate was lower at 25.2% in Q4FY2022 compared
to 25.7% in Q4FY2021. Net Profit increased 13% to Rs 540.54 crore in the
quarter ended March 2022.
Financial Performance FY2022:
For the year ended March 2022 (FY2022), Bank
posted 19% jump in the net profit at Rs 1889.82 crore. The net interest income
rose 8% to Rs 5961.96 crore, while non-interest income moved up 7% to Rs 2089.09
crore in FY2022. The operating expenses increased 16% to Rs 4293.20 crore, while
provision and contingencies declined 27% to Rs 1221.77 crore in FY2022. The
profit before tax increased 19% to Rs 2536.08 crore in FY2022. The expense
ratio increased 405 bps to 53.3% in FY2022 compared to 49.3% in FY2021. After
considering 25.5% of effective tax rate, the net profit moved up 19% to Rs 1889.82
crore in FY2022.
|
Federal Bank: Results
|
|
Particulars
|
2203 (3)
|
2103 (3)
|
Var %
|
2203 (12)
|
2103 (12)
|
Var %
|
|
Interest Earned
|
3483.24
|
3366.34
|
3
|
13660.76
|
13757.91
|
-1
|
|
Interest Expended
|
1958.03
|
1945.96
|
1
|
7698.80
|
8224.20
|
-6
|
|
Net Interest Income
|
1525.21
|
1420.38
|
7
|
5961.96
|
5533.71
|
8
|
|
Other Income
|
465.00
|
465.37
|
0
|
2089.09
|
1958.70
|
7
|
|
Net Total Income
|
1990.21
|
1885.75
|
6
|
8051.05
|
7492.41
|
7
|
|
Operating Expenses
|
1192.01
|
1000.66
|
19
|
4293.20
|
3691.72
|
16
|
|
Operating Profits
|
798.20
|
885.09
|
-10
|
3757.85
|
3800.69
|
-1
|
|
Provisions &
Contingencies
|
75.24
|
242.33
|
-69
|
1221.77
|
1663.42
|
-27
|
|
Profit Before Tax
|
722.96
|
642.76
|
12
|
2536.08
|
2137.27
|
19
|
|
Provision for tax
|
182.42
|
164.95
|
11
|
646.26
|
546.97
|
18
|
|
PAT
|
540.54
|
477.81
|
13
|
1889.82
|
1590.30
|
19
|
|
EPS*(Rs)
|
10.3
|
9.1
|
|
9.0
|
7.6
|
|
|
Adj BV (Rs)
|
81.1
|
72.1
|
|
81.1
|
72.1
|
|
|
* Annualized on current equity of
Rs 420.60 crore. Face Value: Rs 2, Figures in Rs crore
|
|
Source: Capitaline Corporate
Database
|
|