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Private sector lender Federal Bank on Wednesday posted a 43.5 per cent fall in its net profit for the quarter ended March 31, 2018, with a sharp spike in its provisions for bad loans.
The bank’s standalone net profit fell to ₹144.9 crore in the fourth quarter of last fiscal compared to a healthy ₹256.59 crore a year ago.
Its net profit for 2017-18 saw a marginal increase of 5.8 per cent at ₹878.8 crore against ₹830.7 crore in 2016-17. The lender’s consolidated net profit rose 6.6 per cent last fiscal at ₹909.6 crore. Its provisions for bad loans shot up by over 200 per cent at ₹371.5 crore in the fourth quarter of last fiscal compared to ₹ 122.7 crore in the same period a year ago.
The bank’s bad loans jumped 62 per cent and gross non-performing assets (NPAs) touched ₹2,795.6 crore as on March 31, 2018, compared to ₹1,727 crore a year ago.
Gross NPAs as a per cent of gross advances also rose steadily to 3 per cent by the end of the fourth quarter of 2017-18 from 2.52 per cent in the third quarter, and 2.33 per cent in the fourth quarter a year ago.
Net NPAs, or bad loans, were 1.69 per cent of net loans in the quarter under review against 1.28 per cent a year ago.
Total income during the quarter ended March 31, 2018, rose to ₹2,862.14 crore against ₹2,598.06 crore in the same period of 2016-17. The bank said it has not taken advantage of the Reserve Bank of India’s recent circular to spread provisioning for mark-to-market losses. “The bank has recognised the entire mark-to-market loss on investments in the respective quarters,” it said.
With the increase in gratuity ceiling to ₹20 lakh, the lender has decided to spread the incremental expenditure of ₹714.3 crore over four quarters.
It has charged ₹178.5 crore to the profit and loss account for the quarter ended March 31, 2018. Federal Bank’s board has recommended the payment of final dividend of ₹1 per share for the fiscal after approval from shareholders.
The bank’s scrip fell 2.27 per cent to close at ₹101.15 apiece on the BSE.
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