Federal Bank Q2 net surges on lower provisioning

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Our Bureau

Kochi, Oct. 17

FEDERAL Bank's net profit in the second quarter jumped to Rs 54.16 crore from Rs 3.19 crore a year ago, helped by a more than 50 per cent reduction in provisioning during the period.

The bank reduced its provisioning to Rs 47.60 crore in the second quarter ended September, as against Rs 102.12 crore allocated in the same period the previous fiscal.

Total income of the Kerala-based bank increased to Rs 393.07 crore in the period from Rs 349.74 crore in the corresponding quarter last year, Mr M. Venugopalan, Chairman and CEO of the bank, said at a press conference here today.

For the first half of the fiscal, the bank made a net profit of Rs 102.84 crore on a total income of Rs 782.57 crore, up from Rs 48.22 crore on a total income of Rs 722.24 crore in the year-agoperiod.

Operating profit in the second quarter was marginally down year-on-year at Rs 101.76 crore from Rs 105.31crore. During the first half, operating profit came down to Rs 196.88 crore (Rs 223.67 crore).

Net level of non-performing assets (NPAs) came down to 1.60 per cent in the month as against 2.22 per cent in September 2004. Capital adequacy ratio as of the month stood at 11.37 per cent.

LKB merger

Mr Venugopalan said due diligence process for the proposed merger with Lord Krishna Bank was currently on and was expected to be over within the next two weeks. Earlier this month, the boards of both the banks had agreed for the merger, subject to shareholders' and regulatory approvals.

GDR issue

Federal Bank is now in the process of going for its first global depository receipts issue (GDR). Mr Venugopalan said draft prospectus for the GDR issue had already been filed.

"Earlier, we had planned to come out with the issue during October. But now we may go for it by November 25," he said, adding that the GDRs would be listed on the London Stock Exchange.

Federal Bank is planning to raise up to $100 million through the GDR.

(This article was published in the Business Line print edition dated October 18, 2005)
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