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Federal Bank has
registered strong 54% surge in the net profit to Rs 803.61 crore for the
quarter ended December 2022 (Q3FY2023). The bank has posted healthy 27% growth
in net interest income (NII), while the core fee income of the bank also zoomed
28% in Q3FY2023. The Net Interest Margin (NIM) of the bank galloped to 3.49% in
Q3FY2023 compared to 3.27% in the corresponding quarter of previous year. the
bank has posted record high quarterly NII, operating profit, fee income and net
profit in Q3FY23.
On business front, the bank as has posted
accelerated 17% growth in business with strong 19% jump in loan book. The asset
quality of the bank has further improved in Q3FY2023. Bank has substantially
improved the credit to deposit ratio to 84.9% at end December 2022 from 81.9% at
end December 2021. However, the CASA ratio of the bank has declined in line
with the industry trend to 34.2% at end December 2022 from 36.7% at end
December 2021.
Asset quality improves: The bank has improved asset quality in Q3FY2023.
The fresh slippages of loans stood at Rs 412 crore
in Q3FY2023 compared with 390 crore in previous quarter and Rs 453 crore in the
corresponding quarter last year.
Fresh additions to GNPA were contributed by
retail segment at Rs 181 crore followed by agriculture at Rs 66 crore, business
banking at Rs 55 crore and commercial banking at Rs 81 crore. The slippages
from corporate were marginal at Rs 6 crore in Q3FY2023.
The recoveries and upgradations of NPAs stood at
Rs 287 crore, while the write-off of loans was at Rs 8 crore in Q3FY2023.
The standard restructured loan book of the bank declined
to Rs 3040 crore end December 2022 from Rs 3266 crore end September 2022.
Provision coverage ratio improved to 69.19% at
end December 2022 compared to 67.41% a quarter ago and 65.80% a year ago.
The capital adequacy ratio of the bank stood at 13.4%
with Tier I ratio at 12.1% at end December 2022.
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Asset Quality
Indicators: Federal Bank
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|
|
Dec-22
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Sep-22
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Jun-22
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Mar-22
|
Dec-21
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Variation
|
|
QoQ
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YTD
|
YoY
|
|
Gross NPA (Rs Crore)
|
4147.85
|
4031.06
|
4155.33
|
4136.74
|
4401.26
|
3
|
0
|
-6
|
|
Net NPA (Rs Crore)
|
1228.59
|
1262.35
|
1420.25
|
1392.62
|
1471.18
|
-3
|
-12
|
-16
|
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% Gross NPA
|
2.43
|
2.46
|
2.69
|
2.80
|
3.06
|
-3
|
-37
|
-63
|
|
% Net NPA
|
0.73
|
0.78
|
0.94
|
0.96
|
1.05
|
-5
|
-23
|
-32
|
|
% PCR
|
69.19
|
67.41
|
65.03
|
65.54
|
65.80
|
178
|
365
|
339
|
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% CRAR - Basel III
|
13.35
|
13.84
|
14.57
|
15.77
|
14.37
|
-49
|
-242
|
-102
|
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% CRAR - Tier I -
Basel III
|
12.13
|
12.62
|
13.31
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14.43
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13.52
|
-49
|
-230
|
-139
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|
Variation in basis
points for figures given in percentages and in % for figures in Rs crore
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Business Highlights:
Strong business growth: The business of the bank has increased 17% YoY
to Rs 372451 crore end December 2022, driven by 19% surge in advances to Rs 171043
crore. Deposits growth accelerated to 15% at Rs 201408 crore at end December
2022 from 10% growth end September 2022.
Market share in advances reached all
time high of 1.26%. The deposits market share stood at 1.12% end December 2022.
Market share in individual inward remittances stood at 20.36% for H1FY23.
CASA deposits ratio eases: The CASA deposits of the bank rose 7% YoY to Rs 68967
crore at end December 2022. The CASA ratio eased to 34.2% at end December 2022
compared to 36.7% at end December 2021 and 36.4% end September 2022.
Strong loan growth: Advances growth was driven by retail loans
rising 18% YoY to Rs 53936 crore at end December 2022. Agri
advances reached Rs 22050.00 crore registering a growth of 19.70%. Business banking
advances grew by 18.03% to reach Rs 14238.36 crore. Commercial Banking grew by
18.40% to Rs 16794.70 crore. Corporate Advances registered a growth of 19.13%
to reach Rs 62182.66 crore from Rs 52197.97 crore.
Investment
book of the bank galloped 23%
YoY to Rs 46265 crore at end December 2022.
Margins improve: The bank has showed sharp 30 bps YoY increase in
cost of deposits to 4.57%, while yield on advances also surged 74 bps YoY to 8.78%
in Q3FY2023. Thus, the NIM has improved 22 bps YoY to 3.49%.
Branch expansion: The bank has added 28 branches and 20 ATMs in
Q3FY2023, taking overall tally to 1333 branches and 1896 ATM`s end December
2022.
Book value of the bank stood at Rs 97.3 per share at end December 2022, while
the adjusted book value (net of NNPA and 10% of restructured advances) was Rs 90.1
per share at end December 2022.
Quarterly Performance
NII surges as NIM improves: Bank has recorded 29% increase in the interest
earned at Rs 4433.25 crore, while interest expenses increased 30% to Rs 2476.72
crore in Q3FY2023. NII improved 27% to Rs 1956.53 crore in the quarter ended
December 2022.
Healthy growth in the core fee income: Bank has posted strong 28% growth in core fee
income to Rs 463 crore, while the forex income jumped 60% to Rs 80 crore. However,
the treasury segment recorded loss of Rs 9 crore mainly on account of Rs 47.61
crore of provision for securities receipts. The overall non-interest income rose
10% to Rs 534 crore in the quarter ended December 2022.
Expenses ratio improves sharply: The operating expenses of the bank increased 10%
to Rs 1216.32 crore, as other expenses moved up 25% to Rs 655.49 crore, while
employee expenses fell 4% to Rs 560.83 crore in Q3FY2023. Cost to income ratio improved
sharply to 48.8% in Q3FY2023 compared with 54.8% in Q3FY2022, helping the
Operating Profit to increase 39% to Rs 1274.21 crore.
Provisions and contingencies decline: The bank has showed 7% decline in provisions to
Rs 198.69 crore. The loan loss provisions increased 109% to Rs 156.70 crore,
while other provisions jumped 42% to Rs 8.51 crore. However, the bank has
written back investment provisions of Rs 2.52 crore and standard asset
provisions dipped 76% to Rs 36 crore in Q3FY2023.
Effective tax rate declined to 25.3% in Q3FY2023 from 25.5% in Q3FY2022. Net
Profit rose by 54% YoY to Rs 803.61 crore during quarter ended December 2022.
Financial Performance 9MFY2023:
Bank has posted 56% increase in net profit to Rs
2107.98 crore in the nine months ended December 2022 (9MFY2023). The net
interest income increased 20% to Rs 5322.87 crore, while non-interest income fell
2% to Rs 1596.14 crore. The net total income increased by 14% to Rs 6919.01 crore
in 9MFY2023. The operating expenses increased 12% to Rs 3459.19 crore, while
provision and contingencies dipped 45% to Rs 633.23 crore, allowing profit
before tax to increase 56% to Rs 2826.59 crore in 9MFY2023. The cost-to-income
ratio improved to 50.0% in 9MFY2023 compared to 51.2% in 9MFY2022. An effective
tax rate eased to 25.4% in 9MFY2023 compared to 25.6% in 9MFY2022. The net
profit has increased 56% to Rs 2107.98 crore in 9MFY2023.
Commenting
on the results, Shyam Srinivasan,
Managing Director & CEO, said, “An all-round strong operating
performance has helped us deliver the highest ever quarterly profit of 804
crore. Credit Cost has improved on the back of continued strong asset quality,
with GNPA and NNPA at 2.43% and 0.73% respectively. Broad based asset growth of
19%, coupled with core revenue profile has yielded in higher ROA, currently at
1.33%.”
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Federal Bank: Results
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Particulars
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2212 (3)
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2112 (3)
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Var %
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2212 (9)
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2112 (9)
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Var %
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2203 (12)
|
2103 (12)
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Var %
|
|
Interest Earned
|
4433.25
|
3442.56
|
29
|
12082.89
|
10177.52
|
19
|
13660.76
|
13757.91
|
-1
|
|
Interest Expended
|
2476.72
|
1903.66
|
30
|
6760.02
|
5740.77
|
18
|
7698.80
|
8224.20
|
-6
|
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Net Interest Income
|
1956.53
|
1538.90
|
27
|
5322.87
|
4436.75
|
20
|
5961.96
|
5533.71
|
8
|
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Other Income
|
534.00
|
484.19
|
10
|
1596.14
|
1624.09
|
-2
|
2089.09
|
1958.70
|
7
|
|
Net Total Income
|
2490.53
|
2023.09
|
23
|
6919.01
|
6060.84
|
14
|
8051.05
|
7492.41
|
7
|
|
Operating Expenses
|
1216.32
|
1108.80
|
10
|
3459.19
|
3101.19
|
12
|
4293.20
|
3691.72
|
16
|
|
Operating Profits
|
1274.21
|
914.29
|
39
|
3459.82
|
2959.65
|
17
|
3757.85
|
3800.69
|
-1
|
|
Provisions &
Contingencies
|
198.69
|
213.98
|
-7
|
633.23
|
1146.53
|
-45
|
1221.77
|
1663.42
|
-27
|
|
Profit Before Tax
|
1075.52
|
700.31
|
54
|
2826.59
|
1813.12
|
56
|
2536.08
|
2137.27
|
19
|
|
Provision for tax
|
271.91
|
178.58
|
52
|
718.61
|
463.84
|
55
|
646.26
|
546.97
|
18
|
|
PAT
|
803.61
|
521.73
|
54
|
2107.98
|
1349.28
|
56
|
1889.82
|
1590.30
|
19
|
|
EPS*(Rs)
|
15.2
|
9.9
|
|
13.3
|
8.5
|
|
8.9
|
7.5
|
|
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Adj BV (Rs)
|
90.1
|
78.1
|
|
90.1
|
78.1
|
|
81.1
|
72.1
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* Annualized on current equity of
Rs 422.95 crore. Face Value: Rs 2, Figures in Rs crore
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Source: Capitaline Corporate
Database
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