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Federal Bank has reported strong 18%
growth in net profit at Rs 1009.53 crore for the quarter ended June 2024
(Q1FY2025). The bank has posted healthy 19% growth in net interest income
(NII), while the core fee income of the bank also improved 20% in Q1FY2025. The
Net Interest Margin (NIM) of the bank eased only marginally to 3.16% in
Q1FY2025 compared to 3.20% in the corresponding quarter of previous year.
On business front, the
bank as has posted 20% growth in business with strong 19% surge in loan book.
The asset quality of the bank was stable in Q1FY2025. Bank has reduced the credit
to deposit ratio to 84.2% at end June 2024 from 84.4% at end June 2023.
However, the CASA ratio of the bank has declined to 29.3% at end June 2024 from
31.8% at end June 2023.
Asset quality stable: The bank has maintained
stable asset quality in Q1FY2025.
The fresh slippages of
loans stood at Rs 424 crore in Q1FY2025 compared with 371 crore in previous
quarter and Rs 501 crore in the corresponding quarter last year.
The recoveries and
upgradations of NPAs stood at Rs 206 crore, while the write-off of loans was at
Rs 9 crore in Q1FY2025.
The standard
restructured loan book of the bank declined to Rs 1825 crore end June 2024.
Provision coverage ratio
was steady at 70.79% at end June 2024 compared to 71.08% a quarter ago and
70.02% a year ago.
The capital adequacy
ratio of the bank stood at 15.6% with Tier I ratio at 14.2% at end June 2024.
The risk weighted assets
of the bank has increased 21% YoY to Rs 189690 crore end June 2024,
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Asset Quality
Indicators: Federal Bank
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Jun-24
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Mar-24
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Dec-23
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Sep-23
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Jun-23
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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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4738.35
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4528.87
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4628.79
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4436.05
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4434.77
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5
|
7
|
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Net NPA (Rs Crore)
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1330.44
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1255.33
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1284.37
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1229.81
|
1274.59
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6
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4
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% Gross NPA
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2.11
|
2.13
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2.29
|
2.26
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2.38
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-2
|
-27
|
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% Net NPA
|
0.60
|
0.60
|
0.64
|
0.64
|
0.69
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0
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-9
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% PCR
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70.79
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71.08
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71.08
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71.03
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70.02
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-29
|
77
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% CRAR - Basel III
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15.57
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16.13
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15.02
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15.50
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14.28
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-56
|
129
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% CRAR - Tier I -
Basel III
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14.17
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14.61
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13.48
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13.79
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12.54
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-44
|
163
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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:
Strong business growth: The business of the bank
has increased 20% YoY to Rs 490204 crore end June 2024, driven by 19% surge in
advances to Rs 224139 crore. Deposits rose 20% to Rs 266065 crore at end June
2024.
CASA deposits ratio eases:
The CASA deposits of the
bank increased 10% YoY to Rs 77901 crore at end June 2024. The current account
deposits increased 7% to Rs 15239 crore, while saving account deposits moved up
6% to Rs 58961 crore end June 2024. The CASA ratio declined to 29.3% at end
June 2024 compared to 31.8% at end June 2023. The term deposits have increased
24% to Rs 188164 crore end June 2024.
Strong loan growth: Advances growth was
driven by retail loans rising 20% YoY to Rs 70020 crore at end June 2024, while
credit to agriculture increased 30% to Rs 30189 crore and MSME 33% to Rs 25675
crore at end June 2024. The corporate credit has moved up 15% to Rs 99276 crore
end June 2024. The overseas credit has jumped 0% to Rs 0 crore end June 2024.
Investment book of the bank increased 23% YoY to Rs 63832 crore at end June 2024.
Margins decline
marginally: The bank has showed 52 bps YoY increase in cost of deposits to
5.84%, while yield on advances rose 22 bps YoY to 9.43% in Q1FY2025. Thus, the
NIM has declined -4 bps YoY to 3.16%.
Branch expansion: The bank has added 14
branches and 26 ATMs in Q1FY2025, taking overall tally to 1518 branches and
2041 ATM`s end June 2024.
Book value of the bank stood at Rs
124.8 per share at end June 2024, while the adjusted book value (net of NNPA
and 10% of restructured advances) was Rs 118.7 per share at end June 2024.
Quarterly Performance
NII rises on strong loan
growth and steady NIMs: Bank has recorded 26% increase in the interest earned at Rs
6330.88 crore, while interest expenses increased 30% to Rs 4038.90 crore in
Q1FY2025. NII improved 19% to Rs 2291.98 crore in the quarter ended June 2024.
Healthy growth in the
core fee income: Bank has posted strong 20% growth in core fee income to Rs 608
crore, while the forex income jumped 47% to Rs 44 crore and treasury income
galloped 33% to Rs 262 crore, supporting 25% jump in the overall non-interest
income to Rs 915.18 crore in the quarter ended June 2024.
Expenses ratio rises: The operating expenses
of the bank increased 27% to Rs 1706.25 crore, as other expenses moved up 32%
to Rs 968.23 crore, while employee expenses increased 20% to Rs 738.02 crore in
Q1FY2025. Cost to income ratio rose to 53.2% in Q1FY2025 compared with 50.9% in
Q1FY2024. Operating profit increased 15% to Rs 1500.91 crore.
Provisions and
contingencies decline: The bank has showed -7% decline in provisions to Rs 144.27 crore.
The loan loss provisions declined -21% to Rs 144.00 crore, while the bank has
written back investment provisions of Rs 3 crore and other provisions of Rs 4
crore. The standard asset provisions increased to Rs 7 crore.
Effective tax rate was steady at 25.6% in Q1FY2025 from 25.6% in Q1FY2024. Net Profit rose by 18%
YoY to Rs 1009.53 crore during quarter ended June 2024.
Financial Performance
FY2024
Bank has posted 24% increase
in net profit to Rs 3720.60 crore in the year ended March 2024 (FY2024). The
net interest income increased 15% to Rs 8293.48 crore, while non-interest
income moved up 32% to Rs 3079.27 crore, pushing up net total income by 19% to
Rs 11372.75 crore in FY2024. The operating expenses increased 30% to Rs 6198.27
crore, while provision and contingencies dipped 74% to Rs 196.10 crore, allowing
profit before tax to increase 23% to Rs 4978.38 crore in FY2024. The
cost-to-income ratio jumped to 54.5% in FY2024 compared to 49.9% in FY2023. An
effective tax rate declined to 25.3% in FY2024 compared to 25.6% in FY2023. The
net profit has increased 24% to Rs 3720.60 crore in FY2024.
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Federal Bank: Results
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Particulars
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2406 (3)
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2306 (3)
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Var %
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2403 (12)
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2303 (12)
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Var %
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Interest Earned
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6330.88
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5024.53
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26
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22188.26
|
16803.63
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32
|
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Interest Expended
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4038.90
|
3105.94
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30
|
13894.78
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9571.47
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45
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Net Interest Income
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2291.98
|
1918.59
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19
|
8293.48
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7232.16
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15
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Other Income
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915.18
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732.41
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25
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3079.27
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2330.00
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32
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Net Total Income
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3207.16
|
2651.00
|
21
|
11372.75
|
9562.16
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19
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Operating Expenses
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1706.25
|
1348.65
|
27
|
6198.27
|
4767.77
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30
|
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Operating Profits
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1500.91
|
1302.35
|
15
|
5174.48
|
4794.39
|
8
|
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Provisions &
Contingencies
|
144.27
|
155.58
|
-7
|
196.10
|
749.89
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-74
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Profit Before Tax
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1356.64
|
1146.77
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18
|
4978.38
|
4044.50
|
23
|
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EO
|
0.00
|
0.00
|
-
|
0.00
|
0.00
|
-
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PBT after EO
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1356.64
|
1146.77
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18
|
4978.38
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4044.50
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23
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Provision for tax
|
347.11
|
293.03
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18
|
1257.78
|
1033.91
|
22
|
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PAT
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1009.53
|
853.74
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18
|
3720.60
|
3010.59
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24
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EPS*(Rs)
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16.5
|
13.9
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15.3
|
12.4
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Adj BV (Rs)
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118.7
|
98.4
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|
113.4
|
94.6
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* Annualized on current equity of
Rs 489.65 crore. Face Value: Rs 2, Figures in Rs crore
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Source: Capitaline Corporate
Database
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