|
Federal Bank has continued to report strong 53% growth in net profit at
Rs 703.71 crore for the quarter ended September 2022 (Q2FY2023). The bank has
posted healthy 19% growth in net interest income (NII), while the core fee
income of the bank has zoomed 38% in Q2FY2023. The Net Interest Margin (NIM) of
the bank continued to improve to 3.30% in Q2FY2023 from 3.22% in the previous
quarter and 3.20% in the corresponding quarter of previous year.
On business front, the bank as has posted improved
14% growth in business with robust 19% surge in loan book. The asset quality of
the bank has improved in Q2FY2023. Bank has substantially improved the credit
to deposit ratio to 86.7% at end September 2022 from 79.8% at end September
2021. The bank has improved deposit growth to 10% from 8% a quarter ago, while the
CASA ratio of the bank rose to 36.4% at end September 2022 from 36.2% at end
September 2021.
Asset quality improves: The bank has further improved asset quality with
decline in fresh slippages of loans in Q2FY2023.
The fresh slippages of loans stood at Rs 390
crore in Q2FY2023 compared with 463 crore in previous quarter and Rs 339 crore
in the corresponding quarter last year.
The recoveries and upgradations of NPAs stood at
Rs 329 crore, while the write-off of loans was at Rs 185 crore in Q2FY2023.
Within
the fresh slippages of loans, the retail segment contributed fresh slippages of
Rs 123 crore, agriculture Rs 98 crore, business banking Rs 77 crore, commercial
vehicle Rs 7 crore and corporate banking Rs 70 core, while the slippages
remained nil for corporate segment for third straight quarter.
The standard restructured loan book of the bank declined
to Rs 3266 crore end September 2022 from Rs 3366 crore end June 2022.
Provision coverage ratio further improved to
67.4% at end September 2022 compared to 65.03% a quarter ago and 65.43% a year
ago.
The capital adequacy ratio of the bank stood at
13.8% with Tier I ratio at 12.6% at end September 2022.
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Asset Quality
Indicators: Federal Bank
|
|
|
Sep-22
|
Jun-22
|
Mar-22
|
Dec-21
|
Sep-21
|
Variation
|
|
QoQ
|
YTD
|
YoY
|
|
Gross NPA (Rs Crore)
|
4031.06
|
4155.33
|
4136.74
|
4401.26
|
4445.84
|
-3
|
-3
|
-9
|
|
Net NPA (Rs Crore)
|
1262.35
|
1420.25
|
1392.62
|
1471.18
|
1502.44
|
-11
|
-9
|
-16
|
|
% Gross NPA
|
2.46
|
2.69
|
2.80
|
3.06
|
3.24
|
-23
|
-34
|
-78
|
|
% Net NPA
|
0.78
|
0.94
|
0.96
|
1.05
|
1.12
|
-16
|
-18
|
-34
|
|
% PCR
|
64.71
|
65.03
|
65.54
|
65.80
|
65.43
|
-32
|
-83
|
-72
|
|
% CRAR - Basel III
|
13.84
|
14.57
|
15.77
|
14.37
|
14.97
|
-73
|
-193
|
-113
|
|
% CRAR - Tier I -
Basel III
|
12.62
|
13.31
|
14.43
|
13.52
|
14.09
|
-69
|
-181
|
-147
|
|
Variation in basis
points for figures given in percentages and in % for figures in Rs crore
|
Business Highlights:
Business growth accelerates: The business of the bank has increased at higher
pace of 14% YoY to Rs 353104 crore end September 2022, driven by 19% surge in
advances to Rs 163958 crore. Deposits also moved up 10% to Rs 189146 crore at
end September 2022.
Healthy CASA deposits ratio: The CASA deposits of the bank increased 11% YoY
to Rs 68873 crore at end September 2022. The CASA ratio rose to 36.4% at end
September 2022 compared to 36.2% at end September 2021, while it was nearly
steady from 36.8% a quarter ago.
Strong loan growth: Advances growth of the bank has accelerated to
19% from 16% growth a quarter ago. The loan growth was driven by retail loans
rising 18% YoY to Rs 52439 crore at end September 2022, while credit to
agriculture increased 18% to Rs 21091 crore and MSME jumped 21% to Rs 15259
crore at end September 2022. The corporate credit has also surged 20% to Rs
75169 crore end September 2022.
Investment book of the bank increased 18% YoY to
Rs 43571 crore at end September 2022.
Strong increase in margins: The bank has showed 4 bps YoY rise in cost of
deposits to 4.36%, while yield on advances jumped 18 bps YoY to 8.29% in
Q2FY2023. Thus, the NIM has improved 10 bps YoY to 3.30%.
Branch expansion: The bank has added 14 branches and 16 ATMs in in
Q2FY2023, taking overall tally to 1305 branches and 1876 ATM`s end September
2022.
Book value of the bank stood at Rs 93.6 per share at end September 2022,
while the adjusted book value (net of NNPA and 10% of restructured advances)
was Rs 86.1 per share at end September 2022.
Quarterly Performance
NII jumps as NIM improves: Bank has recorded 19% increase in the interest
earned at Rs 4020.78 crore, while interest expenses galloped 19% to Rs 2258.95
crore in Q2FY2023. NII improved 19% to Rs 1761.83 crore in the quarter ended
September 2022.
Strong growth in the core fee income: Bank has posted strong 38% growth in core fee
income to Rs 446 crore, while forex income surged 88% to Rs 94 crore. However,
the treasury income declined 41% to Rs 70 crore. The overall other income
increased 24% to Rs 609.52 crore in the quarter ended September 2022.
Expenses ratio improves: The operating expenses of the bank increased 9%
to Rs 1159.11 crore, as other expenses moved up 32% to Rs 643.48 crore, while
employee expenses fell 10% to Rs 515.63 crore in Q2FY2023. Cost to income ratio
dipped 48.9% in Q2FY2023 compared with 53.7% in Q2FY2022, helping the Operating
Profit to increase 33% to Rs 1212.24 crore.
Provisions and contingencies decline: The bank has showed 8% decline in provisions to
Rs 267.86 crore. The loan loss provisions stood at Rs 205 crore and standard
asset provisions at Rs 39 crore. The investment provisions and other provisions
were nil in Q2FY2023.
Effective tax rate was steady 25.5% in Q2FY2023 from 25.7% in Q2FY2022. Net
Profit surged by 53% YoY to Rs 703.71 crore during quarter ended September
2022.
Financial Performance H1FY2023:
Bank has posted 58% increase in net profit to Rs
1304.37 crore in the year half year ended September 2022 (H1FY2023). The net
interest income increased 16% to Rs 3366.34 crore, while non-interest income
moved up 7% to Rs 1062.14 crore, pushing up net total income by 14% to Rs
4428.48 crore in H1FY2023. The operating expenses increased 13% to Rs 2242.87
crore, while provision and contingencies dipped 45% to Rs 434.54 crore,
allowing profit before tax to increase 57% to Rs 1751.07 crore in H1FY2023. The
cost-to-income ratio improved to 50.6% in H1FY2023 compared to 51.2% in
H1FY2022. An effective tax rate declined to 25.5% in H1FY2023 compared to 25.6%
in H1FY2022. The net profit has increased 58% to Rs 1304.37 crore in H1FY2023.
|
Federal Bank: Results
|
|
Particulars
|
2209 (3)
|
2109 (3)
|
Var %
|
2209 (6)
|
2109 (6)
|
Var %
|
2203 (12)
|
2103 (12)
|
Var %
|
|
Interest Earned
|
4020.78
|
3379.25
|
19
|
7649.64
|
6734.96
|
14
|
13660.76
|
13757.91
|
-1
|
|
Interest Expended
|
2258.95
|
1899.83
|
19
|
4283.30
|
3837.11
|
12
|
7698.80
|
8224.20
|
-6
|
|
Net Interest Income
|
1761.83
|
1479.42
|
19
|
3366.34
|
2897.85
|
16
|
5961.96
|
5533.71
|
8
|
|
Other Income
|
609.52
|
491.65
|
24
|
1062.14
|
996.14
|
7
|
2089.09
|
1958.70
|
7
|
|
Net Total Income
|
2371.35
|
1971.07
|
20
|
4428.48
|
3893.99
|
14
|
8051.05
|
7492.41
|
7
|
|
Operating Expenses
|
1159.11
|
1058.99
|
9
|
2242.87
|
1992.39
|
13
|
4293.20
|
3691.72
|
16
|
|
Operating Profits
|
1212.24
|
912.08
|
33
|
2185.61
|
1901.60
|
15
|
3757.85
|
3800.69
|
-1
|
|
Provisions &
Contingencies
|
267.86
|
292.62
|
-8
|
434.54
|
788.79
|
-45
|
1221.77
|
1663.42
|
-27
|
|
Profit Before Tax
|
944.38
|
619.46
|
52
|
1751.07
|
1112.81
|
57
|
2536.08
|
2137.27
|
19
|
|
Provision for tax
|
240.67
|
159.20
|
51
|
446.70
|
285.26
|
57
|
646.26
|
546.97
|
18
|
|
PAT
|
703.71
|
460.26
|
53
|
1304.37
|
827.55
|
58
|
1889.82
|
1590.30
|
19
|
|
EPS*(Rs)
|
13.3
|
8.7
|
|
12.4
|
7.8
|
|
9.0
|
7.5
|
|
|
Adj BV (Rs)
|
86.1
|
75.5
|
|
86.1
|
75.5
|
|
81.1
|
72.1
|
|
|
* Annualized on current equity of
Rs 421.91 crore. Face Value: Rs 2, Figures in Rs crore
|
|
Source: Capitaline Corporate
Database
|
|