Money & Banking

Federal Bank June quarter profit up 26% at Rs 210 cr

V SAJEEV KUMAR Kochi | Updated on January 11, 2018

Shyam Srinivasan, MD and CEO, Federal Bank (file pic)

Riding on the comfort of overall credit growth, Kerala-based Federal Bank posted a 26 per cent surge in net profit at ₹210.15 crore in the first quarter of FY17.

“Consistent growth in deposits and savings at 20 per cent, increase in overall credit at 29 per cent and controlled expenses are the contributing factors for the good performance, which is expected to continue further,” Shyam Srinivasan, Managing Director and CEO, told BusinessLine over phone from Mumbai. To a question, he said the first quarter growth was slightly below expectations even as the bank had a good performance in the last two quarters.

“Our job is to make sure that the underlying performances will improve in every quarter. I am happy that this quarter witnessed the highest operating profit on the back of very strong operating performance,” he added.

The operating profit witnessed a 31 per cent surge touching ₹557.86 crore, compared to ₹425.86 crore. The total business reached ₹1,72,145.95 crore. While total deposits increased 18 per cent to touch ₹95,838.84 crore, total advances grew 29 per cent to ₹76,307.11 crore.

CASA deposits grew 20.33 per cent to reach ₹32,048 crore. CASA as a percentage to total deposits increased to 33.44 per cent. Net interest income grew 15.68 per cent to ₹800.68 crore (₹692.17 crore).

On asset quality, gross NPA stood at ₹1,867.94 crore which as a percentage to gross advances was 2.42 per cent. The net NPA stood at ₹1,061.26 crore, and the net NPA percentage to net advances at 1.39 per cent.

Asked about the increase in gross and net NPAs, Srinivasan said both gross and net NPAs in the quarter improved significantly to 2.42 per cent from 2.92 per cent in the first quarter of the last fiscal. However, sequentially, it has seen a minimum increase to 2.42 per cent from 2.32 per cent. This is because one account in the big-ticket segment slipped; otherwise it was fairly consistent, he said.

On a possible rate cut in the next RBI policy, he said the management expects the Monetary Policy Committee would look at the current inflation trend which suggests that a rate cut is imminent.

Published on July 26, 2017

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