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Federal Bank has reported strong 36%
surge in net profit at Rs 953.82 crore for the quarter ended September 2023
(Q2FY2024). The bank has posted healthy 17% growth in net interest income
(NII), while the core fee income of the bank also improved 30% in Q2FY2024. The
Net Interest Margin (NIM) of the bank improved on sequential basis to 3.16% in
Q2FY2024 from 3.15% in Q1FY2024, while eased from 3.30% in the corresponding
quarter of previous year.
On business front, the bank as has
posted 21% growth in business with strong 20% surge in loan book. The asset
quality of the bank has further improved in Q2FY2024. Bank has witnessed
decline in the credit to deposit ratio to 84.2% at end September 2023 from 86.7%
at end September 2022 due to sharp growth in the deposits. The CASA ratio of
the bank has eased to 31.2% at end September 2023 from 31.8% end June 2023 and 36.4%
at end September 2022.
Asset quality improves: The bank has continued to improve asset
quality with fresh slippages of loans under control in Q2FY2024.
The fresh slippages of loans stood
at Rs 373 crore in Q2FY2024 compared with 501 crore in previous quarter and Rs 390
crore in the corresponding quarter last year.
The recoveries and upgradations of
NPAs stood at Rs 359 crore, while the write-off of loans was at Rs 13 crore in
Q2FY2024.
The standard restructured loan book
of the bank declined to Rs 2420 crore end September 2023.
Provision coverage ratio improved to
71.03% at end September 2023 compared to 70.02% a quarter ago and 67.41% a year
ago.
The capital adequacy ratio of the
bank stood at 15.5% with Tier I ratio at 13.8% at end September 2023.
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Asset Quality
Indicators: Federal Bank
|
|
|
Sep-23
|
Jun-23
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Mar-23
|
Dec-22
|
Sep-22
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Variation
|
|
QoQ
|
YTD
|
YoY
|
|
Gross NPA (Rs Crore)
|
4436.05
|
4434.77
|
4183.77
|
4147.85
|
4031.06
|
0
|
6
|
10
|
|
Net NPA (Rs Crore)
|
1229.81
|
1274.59
|
1205.01
|
1228.59
|
1262.35
|
-4
|
2
|
-3
|
|
% Gross NPA
|
2.26
|
2.38
|
2.36
|
2.43
|
2.46
|
-12
|
-10
|
-20
|
|
% Net NPA
|
0.64
|
0.69
|
0.69
|
0.73
|
0.78
|
-5
|
-5
|
-14
|
|
% PCR
|
71.03
|
70.02
|
70.02
|
69.19
|
67.41
|
101
|
101
|
362
|
|
% CRAR - Basel III
|
15.50
|
14.28
|
14.81
|
13.35
|
13.84
|
122
|
69
|
166
|
|
% CRAR - Tier I -
Basel III
|
13.79
|
12.54
|
13.02
|
12.13
|
12.62
|
125
|
77
|
117
|
|
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 21% YoY to Rs 428836 crore end September 2023, driven by 20% surge in
advances to Rs 195968 crore. Deposits galloped 23% to Rs 232868 crore at end
September 2023.
CASA deposits ratio eases, but
retail deposits driving overall deposits growth: The CASA deposits of the bank rose 5%
YoY to Rs 72589 crore at end September 2023. The current account deposits increased
26% to Rs 14182 crore, while saving account deposits rose 1% to Rs 56672 crore
end September 2023. The CASA ratio declined to 31.2% at end September 2023
compared to 36.4% at end September 2022. The term deposits have increased 31% to
Rs 160279 crore end September 2023. Core deposits accounts for
97.87% of total deposits. NRE Term Deposits up by 10% YoY end September 2023.
Strong loan growth: Advances growth was driven by retail
loans rising 18% YoY to Rs 62009 crore at end September 2023, while credit to
agriculture increased 24% to Rs 25115 crore and MSME 32% to Rs 21056 crore at
end September 2023. The corporate credit also surged declined 17% to Rs 87788 crore
end September 2023. Within the loan book, CV/CE book grew at 67%
YoY and 11% QoQ, business banking loan grew at 18% YoY and 6% QoQ and MFI
portfolio crosses Rs 2300 crore.
Investment
book of the bank moved up 27% YoY to Rs 55169
crore at end September 2023.
Margins improve sequentially: The bank has showed 116 bps YoY
increase in cost of deposits to 5.52%, while yield on advances also surged 106 bps
YoY to 9.35% in Q2FY2024. The NIM has declined 14 bps YoY, but improved 1 bps
QoQ to 3.16% in Q2FY2024.
Branch expansion: The bank has added 23 branches and 17
ATMs in Q2FY2024, taking overall tally to 1389 branches and 1937 ATM`s end
September 2023. The employee base of the bank has jumped to 14270 employees end
June 2023.
Book value of the bank stood at Rs 111.7 per
share at end September 2023, while the adjusted book value (net of NNPA and 10%
of restructured advances) was Rs 105.6 per share at end September 2023.
Quarterly Performance
NII rises to record high levels: Bank has recorded 36% increase in
the interest earned at Rs 5455.28 crore, while interest expenses zoomed 50% to
Rs 3398.86 crore in Q2FY2024. NII improved 17% to record high level of Rs 2056.42
crore in the quarter ended September 2023.
Healthy growth in the core fee
income: Bank has posted
strong 30% growth in core fee income to Rs 578 crore. The treasury income was
flat at yoy at Rs 70 crore, while forex income declined 13% to Rs 82 crore. The
overall non-interest income increased 20% to Rs 730.42 crore in the quarter
ended September 2023.
Expenses ratio rises: The operating expenses of the bank
increased 26% to Rs 1462.39 crore, as other expenses moved up 30% to Rs 836.08 crore,
while employee expenses increased 21% to Rs 626.31 crore in Q2FY2024. Cost to
income ratio increased to 52.5% in Q2FY2024 compared with 48.9% in Q2FY2023. The
Operating Profit increased 9% to Rs 1324.45 crore.
Provisions and contingencies
decline: The bank has
showed 84% decline in provisions to Rs 43.90 crore. The loan loss provisions
declined 70% to Rs 61 crore, while the bank has reversed investment provisions
Rs 6 crore and standard asset provisions of Rs 11 crore in Q2FY2024.
Effective tax rate was steady
at 25.5% in
Q2FY2024 from 25.5% in Q2FY2023. Net Profit jumped 36% YoY to Rs 953.82 crore
during quarter ended September 2023.
Financial Performance H1FY2024
Bank has posted 39% increase in net
profit to Rs 1807.56 crore in the half year ended September 2023 (H1FY2024). The
net interest income increased 18% to Rs 3975.01 crore, while non-interest
income moved up 38% to Rs 1462.83 crore, pushing up net total income by 23% to
Rs 5437.84 crore in H1FY2024. The operating expenses increased 25% to Rs 2811.04
crore, while provision and contingencies dipped 54% to Rs 199.48 crore, allowing
profit before tax to increase 39% to Rs 2427.32 crore in H1FY2024. The
cost-to-income ratio deteriorated to 51.7% in H1FY2024 compared to 50.6% in
H1FY2023. An effective tax rate was flat at 25.5% in H1FY2024 compared to 25.5%
in H1FY2023. The net profit has increased 39% to Rs 1807.56 crore in H1FY2024.
Shyam
Srinivasan, Managing Director & CEO, Federal Bank said “The Q2 Results are
a sigma of many of our initiatives coming together well and has helped us
deliver our highest ever profits. Some of the marquee investments we raised in
Q2 are a true testimony to our governance, social and environmental commitment
standards. We are pleased to deliver on our commitments made to them and do
stay determined to make continued progress on all our chosen areas in pursuit
of our vision of being the Most Admired Bank.”
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Federal Bank: Results
|
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Particulars
|
2309 (3)
|
2209 (3)
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Var %
|
2309 (6)
|
2209 (6)
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Var %
|
2303 (12)
|
2203 (12)
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Var %
|
|
Interest Earned
|
5455.28
|
4020.78
|
36
|
10479.81
|
7649.64
|
37
|
16803.63
|
13660.76
|
23
|
|
Interest Expended
|
3398.86
|
2258.95
|
50
|
6504.80
|
4283.30
|
52
|
9571.47
|
7698.80
|
24
|
|
Net Interest Income
|
2056.42
|
1761.83
|
17
|
3975.01
|
3366.34
|
18
|
7232.16
|
5961.96
|
21
|
|
Other Income
|
730.42
|
609.52
|
20
|
1462.83
|
1062.14
|
38
|
2330.00
|
2089.09
|
12
|
|
Net Total Income
|
2786.84
|
2371.35
|
18
|
5437.84
|
4428.48
|
23
|
9562.16
|
8051.05
|
19
|
|
Operating Expenses
|
1462.39
|
1159.11
|
26
|
2811.04
|
2242.87
|
25
|
4767.77
|
4293.20
|
11
|
|
Operating Profits
|
1324.45
|
1212.24
|
9
|
2626.80
|
2185.61
|
20
|
4794.39
|
3757.85
|
28
|
|
Provisions &
Contingencies
|
43.90
|
267.86
|
-84
|
199.48
|
434.54
|
-54
|
749.89
|
1221.77
|
-39
|
|
Profit Before Tax
|
1280.55
|
944.38
|
36
|
2427.32
|
1751.07
|
39
|
4044.50
|
2536.08
|
59
|
|
EO
|
0.00
|
0.00
|
-
|
0.00
|
0.00
|
-
|
0.00
|
0.00
|
-
|
|
PBT after EO
|
1280.55
|
944.38
|
36
|
2427.32
|
1751.07
|
39
|
4044.50
|
2536.08
|
59
|
|
Provision for tax
|
326.73
|
240.67
|
36
|
619.76
|
446.70
|
39
|
1033.91
|
646.26
|
60
|
|
PAT
|
953.82
|
703.71
|
36
|
1807.56
|
1304.37
|
39
|
3010.59
|
1889.82
|
59
|
|
EPS*(Rs)
|
15.7
|
11.6
|
|
14.9
|
10.8
|
|
14.2
|
8.9
|
|
|
Adj BV (Rs)
|
105.6
|
86.1
|
|
105.6
|
86.1
|
|
94.6
|
81.1
|
|
|
* Annualized on current equity of
Rs 484.97 crore post preferential allotment of 7.27 crore equity
shares to IFC. Face Value: Rs 2, Figures in Rs crore
|
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Source: Capitaline Corporate
Database
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