Private sector lender Federal Bank registered a 26.2 per cent drop in its net profits in the second quarter of the fiscal with a sharp rise in its provisions.

The bank reported a net profit of ₹307.62 crore for the quarter ended September 30, 2020 as against ₹416.70 crore a year ago. Its net profit was ₹400.77 crore in the first quarter this fiscal.

Its total income increased by 8.8 per cent to ₹3,997.23 crore in the July to September quarter this fiscal versus ₹3,675.17 crore a year ago.

Its net interest income rose by 22.8 per cent to ₹1,379.87 crore in the second quarter this fiscal as against ₹1,123.77 crore a year ago.

Net interest margin stood at 3.13 per cent as on September 30, 2020.

“The bank could deliver the highest ever operating profit, which crossed ₹1,000 crore for the first time in its history. Low risk and a high yielding product like gold loan registered handsome growth,” said Shyam Srinivasan, Managing Director and CEO, Federal Bank, adding that it continues to weather the

turbulence in the external environment by returning strong numbers for CASA and asset quality.

As a prudent step and as part of strengthening the balance sheet, Federal Bank made standard asset provisions of ₹402 crore, taking the total to ₹588 crore held as at the end of the second quarter, he further said.

Its total provisions more than doubled to ₹592.06 crore in the second quarter this fiscal from ₹251.77 crore a year ago.

Gross non-performing assets were marginally down at ₹3,552.19 crore or 2.84 per cent of gross advances as on September 30, 2020 compared to 3.07 per cent a year ago. Net NPAs amounted to 0.99 per cent of net advances as on September 30, 2020 versus 1.59 per cent a year ago.

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