Federal Bank shares drop 6% after Q3 profit decline; JPMorgan sticks to Buy, UBS cuts target price
Federal Bank fell over 6% to Rs 178.1 in Tuesday's intraday trade on the BSE after the private sector lender reported a 5% year-on-year decline in its net profit for the third quarter ending December 30, 2024. The bank posted a net profit of Rs 955 crore, down from Rs 1,007 crore in the same period last year, despite recording its highest-ever pre-provision operating profit.
The bank has made accelerated provisions of Rs 292 crore during the quarter. Total provisions also stood at Rs 292 crore after adjustment of regular provisions and provisions write-back as against Rs 91 crore made in the year ago period. Its provision coverage ratio rose to 74.21% from 71.08%.
«In alignment with our commitment to building a robust foundation, we have undertaken accelerated provisioning for certain riskier asset classes this quarter,» managing director KVS Manian said.
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The Kochi-headquartered lender's asset quality however improved with gross non-performing assets ratio falling to 1.95% at the end of December 2024 from 2.29% a year back. Net NPA ratio stood at 0.49% against 0.64%.
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