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Federal Bank has reported sharp 64% growth in
net profit at Rs 600.66 crore for the quarter ended June 2022 (Q1FY2023). The
bank has posted healthy 13% growth in net interest income (NII), while the core
fee income of the bank also improved 77% in Q1FY2023. The domestic Net Interest
Margin (NIM) of the bank improved to 3.22% in Q1FY2023 compared to 3.15% in the
corresponding quarter of previous year.
On business front, the bank as has posted improved
12% growth in business with strong 16% surge in loan book. The asset quality of
the bank has improved in Q1FY2023. Bank has substantially improved the credit
to deposit ratio to 84.2% at end June 2022 from 78.4% at end June 2021. Further,
the CASA ratio of the bank has also improved to 36.8% at end June 2022 from
34.8% at end June 2021.
Asset
quality improves: The bank has improved asset
quality in Q1FY2023.
The fresh slippages of loans stood at Rs 463
crore in Q1FY2023, up from Rs 399 crore in Q4FY2022.
The recoveries and upgradations of NPAs stood at
Rs 281 crore, while the write-off of loans was at Rs 163 crore in Q1FY2023.
Fresh additions to GNPA were contributed by
retail segment at Rs 204 crore followed by agriculture at Rs 89 crore, business
banking at Rs 107 crore and commercial banking at Rs 42 crore. The slippages
from corporate were nil in Q1FY2023.
The standard restructured loan book of the bank
stood at Rs 3366 crore end June 2022.
Provision coverage ratio was steady at 65.0% at
end June 2022 compared to 65.5% a quarter ago and 65.0% a year ago.
The capital adequacy ratio of the bank stood at
14.6% with Tier I ratio at 13.3% at end June 2022.
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Asset Quality Indicators:
Federal Bank
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Jun-22
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Mar-22
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Dec-21
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Sep-21
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Jun-21
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Variation
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QoQ
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YoY
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Gross NPA (Rs Crore)
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4155.33
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4136.74
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4401.26
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4445.84
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4649.33
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0
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-11
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Net NPA (Rs Crore)
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1420.25
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1392.62
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1471.18
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1502.44
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1593.24
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2
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-11
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% Gross NPA
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2.69
|
2.80
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3.06
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3.24
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3.50
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-11
|
-81
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% Net NPA
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0.94
|
0.96
|
1.05
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1.12
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1.23
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-2
|
-29
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% PCR
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65.03
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65.54
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65.80
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65.43
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65.00
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-51
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3
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% CRAR - Basel III
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14.57
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15.77
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14.37
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14.97
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14.64
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-120
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-7
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% CRAR - Tier I -
Basel III
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13.31
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14.43
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13.52
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14.09
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13.87
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-112
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-56
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Variation in basis
points for figures given in percentages and in % for figures in Rs crore
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Business Highlights:
Business
growth accelerates: The business of the
bank has increased at an accelerated pace of 12% YoY to Rs 337748 crore end
June 2022 up from 7% growth at end March 2022. The surge in business growth was
driven by 16% jump in advances to Rs 154393 crore. Deposits rose 8% to Rs
183355 crore at end June 2022.
CASA
deposits ratio improves:
The CASA deposits of the bank galloped 15% YoY to Rs 67539 crore at end June
2022. The CASA ratio improved to 36.8% at end June 2022 compared to 34.8% at
end June 2021.
Strong
loan growth: Advances growth was
driven by retail loans rising 14% YoY to Rs 49872 crore at end June 2022, while
credit to agriculture increased 19% to Rs 19988 crore and MSME 21% to Rs 14224
crore at end June 2022. The corporate credit has also moved up 16% to Rs 70309
crore end June 2022.
Investment
book of the bank increased 10%
YoY to Rs 41186 crore at end June 2022.
Margins
improve: The bank has showed sharp
25 bps YoY decline in cost of deposits to 4.20%, while yield on advances eased 21
bps YoY to 7.94% in Q1FY2023. Thus, the NIM has improved 7 bps YoY to 3.22%.
Branch
expansion: The bank has added 9
branches and reduced 25 ATMs in Q1FY2023, taking overall tally to 1291 branches
and 1860 ATM`s end June 2022.
Book
value of the bank stood at Rs
92.2 per share at end June 2022, while the adjusted book value (net of NNPA and
10% of restructured advances) was Rs 83.8 per share at end June 2022.
Quarterly Performance
NII
rises as NIM improves:
Bank has recorded 8% increase in the interest earned at Rs 3628.86 crore, while
interest expenses rose 4% to Rs 2024.35 crore in Q1FY2023. NII improved 13% to
Rs 1604.51 crore in the quarter ended June 2022.
Healthy
growth in the core fee income: Bank has posted strong 77% growth in core fee income to Rs 378
crore, while the forex income jumped 54% to Rs 63 crore. However, the treasury
income declined 97% to Rs 12 crore causing 18% dip in the overall non-interest
income to Rs 452.62 crore in the quarter ended June 2022.
Expenses
ratio rises: The operating expenses
of the bank increased 16% to Rs 1083.76 crore, as other expenses moved up 44%
to Rs 584.44 crore. However, the employee expenses fell 5% to Rs 499.32 crore
in Q1FY2023. Cost to income ratio increased to 52.7% in Q1FY2023 compared with
47.4% in Q1FY2022, causing 6% decline in the operating profit to Rs 973.37
crore.
Provisions
and contingencies dip:
The bank has showed 69% decline in provisions to Rs 166.68 crore. The loan loss
provisions declined 67% to Rs 150 crore and standard asset provisions fell 90%
to Rs 18.00 crore. The bank has reversed investment provisions of Rs 1 crore
and other provisions were nil in Q1FY2023.
Effective tax rate was nearly flat at 25.5% in
Q1FY2023 from 25.6% in Q1FY2022. Net Profit jumped by 64% YoY to Rs 600.66
crore during quarter ended June 2022.
Financial Performance FY2022:
Bank has posted 19% increase in net profit to Rs
1889.82 crore in the year ended March 2022 (FY2022). The net interest income rose
8% to Rs 5961.96 crore, while non-interest income moved up 7% to Rs 2089.09
crore, pushing up net total income by 7% to Rs 8051.05 crore in FY2022. The
operating expenses increased 16% to Rs 4293.20 crore, while provision and
contingencies declined 27% to Rs 1221.77 crore, allowing profit before tax to
increase 19% to Rs 2536.08 crore in FY2022. The cost-to-income ratio improved
to 53.3% in FY2022 compared to 49.3% in FY2021. An effective tax rate was flat
at 25.5% in FY2022 compared to 25.6% in FY2021. The net profit has increased
19% to Rs 1889.82 crore in FY2022.
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Federal Bank: Results
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Particulars
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2206 (3)
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2106 (3)
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Var %
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2203 (12)
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2103 (12)
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Var %
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Interest Earned
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3628.86
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3355.71
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8
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13660.76
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13757.91
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-1
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Interest Expended
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2024.35
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1937.28
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4
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7698.80
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8224.20
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-6
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Net Interest Income
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1604.51
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1418.43
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13
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5961.96
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5533.71
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8
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Other Income
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452.62
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551.78
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-18
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2089.09
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1958.70
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7
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Net Total Income
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2057.13
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1970.21
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4
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8051.05
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7492.41
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7
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Operating Expenses
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1083.76
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933.40
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16
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4293.20
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3691.72
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16
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Operating Profits
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973.37
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1036.81
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-6
|
3757.85
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3800.69
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-1
|
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Provisions &
Contingencies
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166.68
|
543.46
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-69
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1221.77
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1663.42
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-27
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Profit Before Tax
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806.69
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493.35
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64
|
2536.08
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2137.27
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19
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Provision for tax
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206.03
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126.06
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63
|
646.26
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546.97
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18
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PAT
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600.66
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367.29
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64
|
1889.82
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1590.30
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19
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EPS*(Rs)
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11.4
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7.0
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9.0
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7.6
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Adj BV (Rs)
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83.8
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73.4
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81.1
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72.1
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* Annualized on current equity of
Rs 420.7 crore. Face Value: Rs 2, Figures in Rs crore
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Source: Capitaline Corporate
Database
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