Federal Bank reported a 28.31 per cent increase in net profit in the third quarter of the fiscal to ₹333.63 crore, against ₹260 crore in the year-ago period. The Kochi-based lender’s net interest income grew by 13.4 per cent to ₹1,077.29 crore for the July to December 2018 quarter, as against ₹950 crore a year ago.

“The net interest margin of the bank as on December 31, 2018, stood at 3.17 per cent,” it said in a release. This is, however, lower than the 3.3 per cent in the year-ago period.

Shyam Srinivasan, Managing Director and CEO, Federal Bank, said even though margins are down compared to last year, it has been steadily moving up over the last three quarters. Total income of the bank rose 20.88 per cent to ₹3,299.96 crore in the third quarter of the fiscal against ₹2,729.83 crore in the same period a year ago. Other income of the bank jumped by 51.13 per cent to ₹345.55 crore in the quarter under review, from ₹228.63 crore in the same period in 2017-18.

The lender’s provisions rose by 1.04 per cent to ₹190.12 crore in the third quarter of the fiscal against ₹162.43 crore in the same period a year ago.

Ashutosh Khajuria, Executive Director and CFO, said the drop in yields resulted in a ₹30-crore jump in provisions towards pensions. 

Srinivasan said the bank has also increased its buffers for two bad assets, resulting in the overall provisioning coverage ratio moving up to 68 per cent. Federal Bank has reduced its exposure to the NBFC sector by ₹500 crore by not renewing loans. The private sector lender does not have any exposure to troubled Jet Airways, Srinivasan said, adding that the exposure to IL&FS is limited to three loans, totalling ₹245 crore, given to special purpose vehicles, which are performing well.

Its gross non-performing assets rose to 3.14 per cent of gross advances as on December 31, 2018, compared to 2.52 per cent a year ago.

Net NPAs also rose to 1.72 per cent of net advances as on December 31, 2018, compared to 1.36 per cent a year ago. But on a sequential basis, it was slightly lower than 1.78 per cent as on September 30, 2018.

Federal Bank shares fell 3.01 per cent and closed at ₹88.65 apiece on the BSE on Thursday.

 

 

 

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