Mumbai: Private lender Federal Bank Monday reported a 54 per cent jump in its December quarter net profit at Rs 804 crore compared to the year-ago period.
The private sector lender’s net interest income rose 27 per cent to Rs 1,957 crore, helped by 19.1 per cent growth in advances and a 0.22 per cent expansion in the net interest margin to 3.49 per cent.
Other income came at Rs 534 crore, as against Rs 484 crore, which included the core fee income being flat at Rs 534 crore and a Rs 9 crore loss on the treasury side from a profit of Rs 72 crore in the year-ago period.
The bank’s total income increased to Rs 4,967 crore in the December quarter from Rs 3,927 crore in the year-ago period.
Federal Bank managing director and chief executive Shyam Srinivasan told reporters that the bank did not struggle for deposits unlike its peers and was able to notch a 15 per cent growth in the number.
The ‘war for deposits’ is likely to continue in the system, and Federal Bank will look forward to utilising its distribution network without playing the pricing game as it is aware of the “elasticity” on this front that exists, Srinivasan said.
He said the NIMs will be over 3.30 per cent going forward, and the bank is on its way to delivering the 17-18 per cent credit growth that it had guided towards for FY23. It is very much possible to continue with the trend of increasing the market share for the bank, Srinivasan said.
Its share in the overall advances now stands at 1.26 per cent. The overall provisions declined to Rs 198.69 crore for the reporting quarter as against Rs 213.98 crore in the year-ago period.
The gross non-performing assets ratio declined to 2.43 per cent from 3.06 per cent in the year-ago period.
At Rs 181 crore, nearly half of the fresh slippages of Rs 398 crore came from retail assets, which Srinivasan said is due to non-payment in restructured advances and “not alarming”.
The recovery and upgrades came at Rs 287 crore, which was higher than the usual run rate of Rs 250 crore per quarter, Srinivasan said, adding that it aims to be over Rs 250 crore in the fourth quarter as well.
The bank has added 60 new branches in the first nine months of FY23, to take its overall network to 1,333. Srinivasan said the bank plans to add another 20 branches in the last quarter.
It will hire more than 1,000 people each in FY23 and FY24, Srinivasan said, adding that the attrition is 3 per cent.
To a question on the initial public offer plans of its subsidiary Fed Fina, Srinivasan hinted that there are no plans to list immediately and added that the papers filed with the market regulator are valid for another 4-5 months.
The bank’s overall capital adequacy stood at 13.35 per cent, which included core buffer of 12.13 per cent, and Srinivasan said it has no plans to raise fresh capital.
Federal Bank shares rose by 1.40 per cent to close at Rs 140.25 apiece on BSE on Monday, as against a 0.28 per cent correction on the benchmark Sensex.
-PTI