The Hindu Business Line : Federal Bank’s Q2 net up 20% on higher interest income

Kochi, Oct. 18 The Aluva-based Federal Bank has registered a 19.9 per cent increase in its net profit in the second-quarter ended September 30, registering Rs 114.28 crore against Rs 95.33 crore in the corresponding period a year ago.

The operating profit of the bank in the second quarter was up 72 per cent touching Rs 302.93 crore against Rs 176.62 crore during the same period last year. The total income increased 38.1 per cent from Rs 675.06 crore to Rs 932.31 crore.

Announcing the unaudited financial results in the second quarter of 2008-09 on Saturday, Mr M.Venugopalan, Managing Director and CEO, pointed out that the increase in interest income, non interest income, impressive growth in advances and increase from investments had led to the spurt in profits of the bank.

He pointed out that the total interest income during the period was up 30.3 per cent from Rs 594.37 crore to Rs 828.10 crore and non-interest income by 29.10 per cent from Rs 80.69 crore to Rs 104.21 crore.

H1 income up 33%

For the six months period ended September, the bank earned a total income of Rs 1,773.64 crore, registering a growth of 32.85 per cent against Rs 1,334.76 crore for the corresponding period a year ago. The income from advances and investments grew by 44.10 per cent and 24.44 per cent, respectively, supported by strong asset growth.

The non-interest income excluding trading income during the six month period could report a growth of 40.10 per cent, supported by fee and commission income, remittance business, distribution business, cash management business, depository business, recovery of written off loan accounts, sale of gold bullion, he said.

The total business of the bank reached Rs 47,757 crore, showing an increase of 18.38 per cent from the corresponding period of the previous fiscal. During the fiscal, the bank reported growth in balance sheet, focusing on the growth of retail small value deposits and discouraging the build up of high cost whole sale products. The total advances went up by 31.39 per cent to Rs 21,326.44 crore as on September 30 from Rs 16,231.99 crore as on Septemebr 30, 2007.

The growth was mainly driven by retail and SME advances, he said.

REJIG MODE

According to Mr Venugopalan, the bank has engaged Boston Consulting Group (BCG) as its consultant in its transformation journey. The BCG will review the bank’s current business strategy, operational systems and organisational capability and suggest methods to obtain a better understanding of the market and customer needs, to prioritise and focus on areas of strength for the bank.

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