Federal Bank Q1 net profit rises over 40%
Federal Bank reported an increase of more than 40% in its June quarter net profit to ₹854 crore on the back of falling provisions and improving business momentum. The bank had posted net profit of ₹601 crore in the year-ago period. Net interest income, the difference between interest earned and expended, climbed 20% to ₹1,919 crore for the June quarter versus ₹1,605 crore during the corresponding period last year.
Net interest margin at 3.15% was down 7 basis points on year on account of the rise in cost of funds. «FY24, unlike many past years, has seen a strong start. We have seen encouraging business growth both on assets and liabilities,» said Shyam Srinivasan, MD, Federal Bank.
«We also see margins picking up from the September quarter, and with asset quality not seeing any significant deterioration, the growth for the bank will be broad-based across different businesses.» Cost to income ratio stood at 50.87% in the June quarter, and was higher sequentially due to ECL (expected credit loss) provisioning and an increase in technology spending. Management indicated that the bank is looking at raising ₹4,000 crore in the current fiscal year and has met many prospective investors. Loans grew 21% on year to ₹1.86 lakh crore led by corporate loan growth of 22%, retail loan growth of 18.8% and SME loans grew at over 17%.
Deposits grew by 21.3% on year to ₹2.22 lakh crore. Gross non-performing loan ratio stood at 2.38% at the end of the June quarter down from 2.69% a year ago. Net NPA was at 0.69%.
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