Federal Bank posted a net profit of ₹903 crore for Q4 FY23, up 67 per cent on year led by strong loan growth across business segments. For FY23, the profit after tax was ₹3,011 crore.

Gross advances for the lender were at ₹1.8 lakh crore as of March 31, up 20 per cent on year, led by 22 per cent growth in agriculture advances, 24 per cent in corporate loans, 18 per cent in commercial banking loans and 17 per cent retail loan growth.

In the earnings call, MD and CEO Shyam Srinivasan said that both retail and wholesale segments are seeing healthy demand. FY23 was one of the best years for the bank in terms of corporate credit growth and the quality of the underlying portfolio, he said.

Loan growth

Srinivasan pegged loan growth for FY24 at 18-20 per cent, wherein he sees retail, wholesale and gold loans growing at around 20 per cent, similar to that seen in FY23. However, growth might be faster in some retail segments such as credit cards, personal loans, microfinance and commercial vehicles where the bank is a relatively newer entrant and has a smaller book.

The corporate demand is being led by increased demand for working capital led by pick up in the capex cycle and capacity utilization levels of around 75 per cent, the bank said adding that the corporate finance pipeline remains robust.

Net Interest Income for FY23 was up 21 per cent to ₹7,232 crore. Net Interest Margin stood at 3.3 per cent.

Srinivasan said that bulk of the impact of the repricing has been done in Q4 and there may be only some residual repricing in the current quarter as deposit rates are likely to have peaked assuming a pause on interest rates. He expects NIMs to remain in the range of 3.33-3.35 per cent for FY24.

Deposits of the bank were up 17 per cent on year at ₹2.1 lakh crore at the end of March. Gross NPA ratio was at 2.4 per cent and net NPA was 0.7 per cent as of March 31.