The Hindu Business Line : Federal Bank net rises 17 pc to Rs 84 cr in Q3

Despite the upward movement in general interest rates, the bank could improve its net interest margin to 3.44 per cent,from 3.19 per cent reported in March and 3.15 per cent of September 2006, a press release issued here said.

The prudent asset-liability management initiatives of the bank could contain the cost of deposits at 5.47 per cent as against 5.49 per cent in September and achieve a return on advance of 9.99 per cent as against 9.93 per cent.

The bank posted a 22 per cent growth in total interest income, which grew to Rs 444.10 crore (Rs 362.74 crore), while the total income grew by 21 per cent to Rs 498.57 crore (Rs 410.87 crore). Net interest income was up 19 per cent at Rs 178.35 crore (Rs 149.44 crore). Non-interest income grew by 12 per cent to Rs 54.47 crore (Rs 48.40 crore).

The bank could contain its net NPA at 0.58 per cent, down from 1.41 per cent reported last year and the operating profit grew by 20 per cent to Rs 135.52 crore.

The total business of the bank grew by Rs 5,223.24 crore to Rs 32,185.98 crore over the corresponding period of last year. Total deposits increased 12.88 per cent to Rs 18,565.76 crore as on December 2006. During the fiscal, the bank followed a conscious approach to reduce its dependence on wholesale deposits and to support its asset growth from retail small deposits as a strategy in managing liquidity and net interest margin.

The savings bank and current deposits could report a growth of 25.30 per cent and 28.71 cent respectively.

Total advances went up by 29.53 per cent to Rs 13,620.23 crore. The growth was mainly driven by retail and SME advances. The retail advances to individuals grew by 54 per cent and reached Rs 3,983 crore, forming 29.24 per cent of the total advances.

The bank had a capital adequacy ratio of 14.6 per cent. It had also taken a decision to strengthen its investment fluctuation reserve by appropriating five per cent of its net profit every year.

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