|
Federal Bank has reported strong 67% growth in net profit at Rs 902.61
crore for the quarter ended March 2023 (Q4FY2023). The bank has posted healthy
25% growth in net interest income (NII), while the core fee income of the bank
also improved 34% in Q4FY2023. The Net Interest Margin (NIM) of the bank
improved to 3.31% in Q4FY2023 compared to 3.16% in the corresponding quarter of
previous year.
On business front, the bank as has posted 19%
growth in business with strong 20% surge in loan book. The asset quality of the
bank was stable in Q4FY2023. Bank has substantially improved the credit to
deposit ratio to 83.1% at end March 2023 from 81.3% at end March 2022. However,
the CASA ratio of the bank has declined to 32.7% at end March 2023 from 36.9%
at end March 2022.
Asset quality improves: The bank has maintained stable asset quality in
Q4FY2023.
The fresh slippages of loans stood at Rs 454
crore in Q4FY2023 compared with 412 crore in previous quarter and Rs 399 crore
in the corresponding quarter last year.
The retail segment
contributed fresh slippages of Rs 143 crore, agriculture Rs 139 crore, business
banking Rs 91 crore, commercial vehicle Rs 5 crore, commercial banking Rs 58
crore, while the slippages in the corporate segment continued to be nil in
Q4FY2023.
Of the gross NPAs of
Rs 4184 crore, the retail segment contributed GNPA of Rs 1181 crore,
agriculture Rs 977 crore, business banking Rs 936 crore, commercial vehicle Rs
30 crore, commercial banking Rs 666 crore and corporate at Rs 394 crore end
March 2023.
The recoveries and upgradations of NPAs stood at
Rs 399 crore, while the write-off of loans was at Rs 19 crore in Q4FY2023.
The standard restructured loan book of the bank
stood at Rs 2830 crore end March 2023.
Provision coverage ratio improved to 70.02% at
end March 2023 compared to 69.19% a quarter ago and 65.54% a year ago.
The capital adequacy ratio of the bank stood at
14.8% with Tier I ratio at 13.0% at end March 2023.
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Asset Quality
Indicators: Federal Bank
|
|
|
Mar-23
|
Dec-22
|
Sep-22
|
Jun-22
|
Mar-22
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Variation
|
|
QoQ
|
YoY
|
|
Gross NPA (Rs Crore)
|
4183.77
|
4147.85
|
4031.06
|
4155.33
|
4136.74
|
1
|
1
|
|
Net NPA (Rs Crore)
|
1205.01
|
1228.59
|
1262.35
|
1420.25
|
1392.62
|
-2
|
-13
|
|
% Gross NPA
|
2.36
|
2.43
|
2.46
|
2.69
|
2.80
|
-7
|
-44
|
|
% Net NPA
|
0.69
|
0.73
|
0.78
|
0.94
|
0.96
|
-4
|
-27
|
|
% PCR
|
70.02
|
69.19
|
67.41
|
65.03
|
65.54
|
83
|
448
|
|
% CRAR - Basel III
|
14.81
|
13.35
|
13.84
|
14.57
|
15.77
|
146
|
-96
|
|
% CRAR - Tier I -
Basel III
|
13.02
|
12.13
|
12.62
|
13.31
|
14.43
|
89
|
-141
|
|
Variation in basis
points for figures given in percentages and in % for figures in Rs crore
|
Business Highlights:
Healthy business growth: The business of the bank has increased 19% YoY
to Rs 390762 crore end March 2023, driven by 20% surge in advances to Rs 177376
crore. Deposits rose 17% to Rs 213386 crore at end March 2023.
CASA deposits ratio declines: The CASA deposits of the bank rose 4% YoY to Rs
69741 crore at end March 2023. The CASA ratio declined to 32.7% at end March
2023 compared to 36.9% at end March 2022.
Strong loan growth: Advances growth was driven by retail loans
rising 17% YoY to Rs 56077 crore at end March 2023, while credit to agriculture
increased 21% to Rs 23355 crore and MSME 19% to Rs 16359 crore at end March
2023. The corporate credit has also jumped 22% to Rs 81585 crore end March
2023.
Investment
book of the bank jumped 25%
YoY to Rs 48983 crore at end March 2023.
Margins improve on yoy basis: The bank has showed sharp 84 bps YoY increase in
cost of deposits to 5.12%, while yield on advances also surged 121 bps YoY to
9.13% in Q4FY2023. Thus, the NIM has improved 15 bps YoY to 3.31%.
Branch expansion: The bank has added 22 branches and 20 ATMs in
Q4FY2023, taking overall tally to 1355 branches and 1916 ATM`s end March 2023.
Book value of the bank stood at Rs 101.6 per share at end March 2023, while
the adjusted book value (net of NNPA and 10% of restructured advances) was Rs
94.6 per share at end March 2023.
Quarterly Performance
NII rises on strong loan growth: Bank has recorded 36% increase in the interest
earned at Rs 4720.74 crore, while interest expenses increased 44% to Rs 2811.45
crore in Q4FY2023. NII improved 25% to Rs 1909.29 crore in the quarter ended
March 2023.
Healthy growth in the core fee income: Bank has posted strong 34% growth in core fee
income to Rs 516 crore, while the treasury income jumped 1500% to Rs 192 crore,
supporting 58% surge in the overall non-interest income to Rs 733.86 crore in
the quarter ended March 2023. However, the forex income declined 62% to Rs 26
crore.
Expenses ratio improves: The operating expenses of the bank increased 10%
to Rs 1308.58 crore, as other expenses moved up 28% to Rs 711.36 crore, while
employee expenses fell -6% to Rs 597.22 crore in Q4FY2023. Cost to income ratio
dipped to 49.5% in Q4FY2023 compared with 59.9% in Q4FY2022, helping the
Operating Profit to increase 67% to Rs 1334.57 crore.
Provisions and contingencies rises: The bank has showed 55% jump in provisions to Rs
116.66 crore. The loan loss provisions declined 16% to Rs 79.64 crore, while the
bank written back investment provisions Rs 2.66 crore in Q4FY2023. However, the
standard asset provisions rebounded to Rs 40 crore.
Effective tax rate rose slightly to 25.9% in Q4FY2023 from 25.2% in Q4FY2022. Net
Profit rose by 67% YoY to Rs 902.61 crore during quarter ended March 2023.
Commenting on the
results and financial performance, Shyam Srinivasan, Managing Director &
CEO, Federal Bank said, “We have delivered industry leading outcomes with
Net profit at ? 903 Cr QoQ and ROE at an all-time high at 17.48%. The
consistent performance exhibited throughout the year has yielded in net annual
profits of ? 3010.59 Cr, while maintaining benign asset quality across the
segments. This very strong performance is a testimony to the dedicated efforts
of the team and the trust of our customers. It’s noteworthy that our market
share gains across product categories is gathering momentum quarters.”
Financial Performance FY2023:
Bank has posted 59% increase in net profit to Rs
3010.59 crore in the year ended March 2023 (FY2023). The net interest income
increased 21% to Rs 7232.16 crore, while non-interest income moved up 12% to Rs
2330.00 crore, pushing up net total income by 19% to Rs 9562.16 crore in
FY2023. The operating expenses increased 11% to Rs 4767.77 crore, while
provision and contingencies dipped 39% to Rs 749.89 crore, allowing profit
before tax to increase 59% to Rs 4044.50 crore in FY2023. The cost-to-income
ratio improved to 49.9% in FY2023 compared to 53.3% in FY2022. An effective tax
rate was steady at 25.6% in FY2023 compared to 25.5% in FY2022. The net profit
has increased 59% to Rs 3010.59 crore in FY2023.
|
Federal Bank: Results
|
|
Particulars
|
2303 (3)
|
2203 (3)
|
Var %
|
2303 (12)
|
2203 (12)
|
Var %
|
|
Interest Earned
|
4720.74
|
3483.24
|
36
|
16803.63
|
13660.76
|
23
|
|
Interest Expended
|
2811.45
|
1958.03
|
44
|
9571.47
|
7698.80
|
24
|
|
Net Interest Income
|
1909.29
|
1525.21
|
25
|
7232.16
|
5961.96
|
21
|
|
Other Income
|
733.86
|
465.00
|
58
|
2330.00
|
2089.09
|
12
|
|
Net Total Income
|
2643.15
|
1990.21
|
33
|
9562.16
|
8051.05
|
19
|
|
Operating Expenses
|
1308.58
|
1192.01
|
10
|
4767.77
|
4293.20
|
11
|
|
Operating Profits
|
1334.57
|
798.20
|
67
|
4794.39
|
3757.85
|
28
|
|
Provisions &
Contingencies
|
116.66
|
75.24
|
55
|
749.89
|
1221.77
|
-39
|
|
Profit Before Tax
|
1217.91
|
722.96
|
68
|
4044.50
|
2536.08
|
59
|
|
EO
|
0.00
|
0.00
|
-
|
0.00
|
0.00
|
-
|
|
PBT after EO
|
1217.91
|
722.96
|
68
|
4044.50
|
2536.08
|
59
|
|
Provision for tax
|
315.30
|
182.42
|
73
|
1033.91
|
646.26
|
60
|
|
PAT
|
902.61
|
540.54
|
67
|
3010.59
|
1889.82
|
59
|
|
EPS*(Rs)
|
17.1
|
10.2
|
|
14.2
|
8.9
|
|
|
Adj BV (Rs)
|
94.6
|
81.1
|
|
94.6
|
81.1
|
|
|
* Annualized on current equity of
Rs 423.36 crore. Face Value: Rs 2, Figures in Rs crore
|
|
Source: Capitaline Corporate
Database
|
|