Federal Bank Q1 results: Net profit jumps 42% to ₹845 crore; NII rises over 19% YoY
₹853.74 crore for the first quarter of FY24, registering a strong growth of 42.2% from ₹600.66 crore in the corresponding period last year. The bank’s net interest income (NII) in Q1FY24 rose 19.6% to R 1,918 crore from ₹1,604.5 crore, YoY. Net interest margin (NIM) contracted marginally by 7 basis points to 3.15% from 3.22% in the June quarter last year.
The fee income of the lender rose 21% YoY to ₹535 crore, while its pre-provision operating profit (PPOP) increased 34% YoY to ₹1,302 crore. On the asset quality front, the Federal Bank's gross non-performing assets (GNPA) in the June quarter increased 6% to ₹4,434.8 crore from ₹4,183.8 crore in the March quarter. Net NPA rose by 5.8% to ₹1,274.6 crore from ₹1,205 crore, QoQ.
The Gross NPA ratio during the quarter rose by 2 bps to 2.38% from 2.36%, while the Net NPA ratio remained stable at 0.69% sequentially. Also Read: TCS clocks slowest start to fiscal year The bank’s provisions and contingencies as on June 30 stood at ₹155.58 crore. Capital Adequacy Ratio was 14.28%, while Provision Coverage Ratio was at 70.02%.
According to brokerage firm Sharekhan, Federal Bank’s Q1FY24 results were a beat on operational performance and net earnings mainly led by fee and other income. “It reported 42% y-o-y earnings growth on the back of ~34% operating profit growth and lower provisions. NIMs have declined sequentially which was on expected lines. Overall performance is muted sequentially on expected lines.
Asset quality has been broadly stable. The bank reported RoA of ~1.3%," Sharekhan said. It has a ‘Buy’ rating on the stock.
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