Money & Banking

Federal Bank Q4 profit down 21%

Our Bureau Mumbai | Updated on May 28, 2020

Shyam Srinivasan, MD and CEO, Federal Bank

Private sector lender Federal Bank reported a 21.04 per cent decline to ₹301.23 crore in the fourth quarter of 2019-20 with a sharp rise in provisions. Its net profit was ₹381.51 crore in the same period a year ago.

“We have taken material provision and increased our coverage ratio. We have made provisions for wage related – back period of 30 months. We enter 2020-21 with the same set of challenges that the world is facing but no baggage,” said Shyam Srinivasan, Managing Director and CEO, Federal Bank, adding that 35 per cent of the total credit book has taken moratorium.

In 2019-20, the bank’s net profit increased by 24 per cent to ₹1,542.78 crore from ₹1,243.89 crore in 2018-19.

For the quarter ended March 31, 2020, the bank reported a 19.27 per cent growth in total income to ₹4,107.95 crore from ₹3,444.04 crore a year ago.

Net interest income grew by 10.9 per cent to ₹1,216.02 crore in the fourth quarter last fiscal versus ₹1,096.53 crore a year ago. Other income increased by 72.72 per cent to ₹711.11 crore in the period under review.

Net interest margin rose to 3.04 per cent for the quarter under review.

Provisions increased to ₹567.5 crore from ₹177.76 crore a year ago. The bank made a special Covid-19 provision of ₹93 crore.

Gross non-performing assets amounted to ₹3,530.83 crore or 2.84 per cent of gross advances as on March 31, 2020 as compared to 2.92 per cent a year ago. Net NPAs stood at 1.31 per cent of net advances as on March 31, 2020 versus 1.48 per cent a year ago.

Srinivasan said the bank has no requirement or a plan for fund raising in the next 12 months.

On IDBI Federal Life Insurance, he said the bank has expressed willingness to take to the permissible maximum and is waiting for permissions. “Discussion between IDBI and Aegis is underway, price discovery is on,” he further said.

Federal Bank had in April said that its Board had approved in-principle purchase of additional stake of up to four per cent in the equity capital of IDBI Federal Life Insurance Co Ltd (IFLIC) from IDBI Bank. Post purchase, its total stake may increase up to 30 per cent.

Published on May 28, 2020

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