|
Federal Bank recorded 8% decline in the net
profit to Rs 367.29 crore in the quarter ended June 2021 (Q1FY2022), driven by higher
loan loss provisions. The net interest income of the bank was impacted due to
higher interest income reversals on account of elevated slippages of loans.
However, the bank has maintained net interest
margin nearly stable with reduction in cost of funds and improvement in the
CASA deposits ratio.
The advances growth of the bank eased slightly
to 8% from 9% a quarter ago, while bank exhibited dip in deposits book to 9%
from 13% helping to improve credit deposit ratio on sequential basis to 78.4%.
CASA deposits ratio of the bank has improved to 34.8% end June 2021.
Asset
quality stable: Asset quality of the
bank has maintained stable, in absolute terms as well as percentage terms in
Q1FY2022.
Gross NPA has increased 27% on yoy basis and 1%
on qoq basis to Rs 4649.33 crore, while Net NPA rose 8% on yoy 2% qoq to Rs
1593.24 crore at end June 2021.
Fresh slippages of advances were elevated at Rs
640 crore in Q1FY2022, while recoveries, upgradations, write-offs and NPA sales
were healthy at Rs 642 crore.
Fresh additions to GNPA were contributed by
retail segment at Rs 127 crore followed by agriculture at Rs 157 crore, business
banking at Rs 169 crore, commercial banking at Rs 117 crore and corporate at Rs
70 crore in Q1FY2022.
The standard restructured advances book of the
bank increased to Rs 2574 crore at end June 2021, compared with Rs 1618 crore a
quarter ago and Rs 406 crore a year ago.
Provision coverage ratio stood at 65.0% at end
June 2021 compared to 65.1% a quarter ago and 75.1% a year ago.
|
Asset Quality
Indicators: Federal Bank
|
|
|
Jun-21
|
Mar-21
|
Dec-20
|
Sep-20
|
Jun-20
|
Variation
|
|
QoQ
|
YoY
|
|
Gross NPA (Rs Crore)
|
4649.33
|
4602.39
|
3470.18
|
3552.19
|
3655.59
|
1
|
27
|
|
Net NPA (Rs Crore)
|
1593.24
|
1569.28
|
757.24
|
1218.14
|
1477.46
|
2
|
8
|
|
% Gross NPA
|
3.50
|
3.41
|
2.71
|
2.84
|
2.96
|
9
|
54
|
|
% Net NPA
|
1.23
|
1.19
|
0.60
|
0.99
|
1.22
|
4
|
1
|
|
% PCR
|
65.00
|
65.14
|
77.10
|
64.65
|
75.09
|
-14
|
-1009
|
|
% CRAR - Basel III
|
14.64
|
14.62
|
14.31
|
14.64
|
14.17
|
2
|
47
|
|
% CRAR - Tier I -
Basel III
|
13.87
|
13.85
|
13.00
|
13.33
|
13.00
|
2
|
87
|
|
Variation in basis
points for figures given in percentages and in % for figures in Rs crore
|
Business
Highlights:
Business
growth eases: Business growth of the
bank moderated to 9% yoy at Rs 302271 crore at end June 2021. The moderation in
business growth was mainly driven by sharp deceleration in deposits growth to
9% at Rs 169393 crore end June 2021. The advances growth eased marginally to 8%
yoy at Rs 132878 crore at end June 2021
Strong
retail loan book growth:
Gross advances book increased 8% yoy to Rs 132878 crore at end June 2021, as
the retail book moved up 15% to Rs 43599 crore, while agriculture loan book
increased 24% to Rs 16837 crore and The business banking book expanded 9% to Rs
11576 crore at end June 2021. Further, the commercial banking book rose 10% to
Rs 12963 crore, but corporate banking book declined 4% to Rs 47812 crore end
June 2021.
Within the retail book, the mortgages jumped 11%
to Rs 7783 crore at end June 2021 from Rs 7009 crore at end June 2020. Housing
increased 11% to Rs 20124 crore, auto 14% to Rs 3583 crore, personal 14% to Rs
1766 crore, while other retail advances surged 29% to Rs 10343 crore at end
June 2021.
CASA
ratio improves: CASA deposits of the
bank increased 19% at Rs 58959 crore gaining the share in overall deposits to 34.8% at end June
2021 compared to 32.0% a year ago. Within the CASA, the saving deposits
increased at strong pace of 19% to Rs 49996 crore, while current account
deposits also galloped 19% to Rs 8963 crore at end June 2021. Retail Deposits
Ratio improved to 92.7% from 90.3% sequentially.
Network
expansion: Bank has network of 1272
branches and 1953 ATMs at end June 2021.
Book
Value per share stood at Rs
82.6 per share at end June 2021, while adjusted Book value (adjusting for NNPA
and 10% of restructured advances) was at Rs 73.4 per share at end June 2021.
Quarterly Performance:
NII
growth eases: Bank has reported 9%
growth in Net Interest Income (NII) at Rs 1418.43 crore for the quarter ended
June 2021. The interest earned declined 3% to Rs 3355.71 crore, while interest expense
also declined 10% to Rs 1937.28 crore in the quarter ended June 2021.
Non-interest
income surges on low bases: The non-interest income of the bank increased 33% to Rs 650.15
crore in Q1FY2022, Core fee income of the bank surged 46% to Rs 214 crore,
while forex income jumped 71% to Rs 41 crore and recoveries in written off
accounts improved 954% to Rs 137 crore in Q1FY2022. However, the treasury
income declined 15% to Rs 258 crore in Q1FY2022.
Net total income increased 16% to Rs 2068.58
crore in the quarter ended June 2021.
Expense
ratio improves: The operating expenses
of the bank rose 9% to Rs 933.40 crore in the quarter ended June 2021. Thus,
the expense ratio declined 264 bps yoy to 45.1% in the quarter ended June 2021,
supporting 22% rise in the operating profit to Rs 1135.18 crore in Q1FY2022.
Provisions
surge: The provisions and contingencies
galloped 63% to Rs 126.06 crore in the quarter under review.
With the jump in provisions, PBT declined 8% to
Rs 493.35 crore. The effective tax rate was higher at 25.6% in Q1FY2022
compared to 25.5% in Q4FY2020. Net Profit fell 8% to Rs 367.29 crore in the
quarter ended June 2021.
Financial Performance FY21
For the year ended March 2021 (FY2021), Bank
posted 3% rise in the net profit at Rs 1590.30 crore. The net interest income
rose 19% to Rs 5533.71 crore, while non-interest income moved up 1% to Rs 1944.91
crore in FY2021. The operating expenses increased 9% to Rs 3691.72 crore, while
provision and contingencies galloped 41% to Rs 1649.63 crore in FY2021. The
profit before tax rose 5% to Rs 2137.27 crore in FY2021. The expense ratio declined
193 bps to 49.4% in FY2021 compared to 51.3% in FY2020. After considering 25.6%
of effective tax rate, the net profit rose 3% to Rs 1590.30 crore in FY2021.
|
Federal Bank: Results
|
|
Particulars
|
2106 (3)
|
2006 (3)
|
Var %
|
2103 (12)
|
2003 (12)
|
Var %
|
|
Interest Earned
|
3355.71
|
3444.15
|
-3
|
13757.91
|
13210.75
|
4
|
|
Interest Expended
|
1937.28
|
2147.71
|
-10
|
8224.20
|
8561.85
|
-4
|
|
Net Interest Income
|
1418.43
|
1296.44
|
9
|
5533.71
|
4648.90
|
19
|
|
Other Income
|
650.15
|
488.37
|
33
|
1944.91
|
1931.41
|
1
|
|
Net Total Income
|
2068.58
|
1784.81
|
16
|
7478.62
|
6580.31
|
14
|
|
Operating Expenses
|
933.40
|
852.43
|
9
|
3691.72
|
3375.61
|
9
|
|
Operating Profits
|
1135.18
|
932.38
|
22
|
3786.90
|
3204.70
|
18
|
|
Provisions &
Contingencies
|
641.83
|
394.62
|
63
|
1649.63
|
1172.17
|
41
|
|
Profit Before Tax
|
493.35
|
537.76
|
-8
|
2137.27
|
2032.53
|
5
|
|
Provision for tax
|
126.06
|
136.99
|
-8
|
546.97
|
489.75
|
12
|
|
PAT
|
367.29
|
400.77
|
-8
|
1590.30
|
1542.78
|
3
|
|
EPS*(Rs)
|
7.4
|
8.0
|
|
8.0
|
7.7
|
|
|
* Annualized on current equity of
Rs 399.26 crore. Face Value: Rs 2, Figures in Rs crore
|
|
Source: Capitaline Corporate
Database
|
|