Federal Bank Q1 profit up 39% to Rs 880 cr

Kochi: Aluva-headquartered private lender Federal Bank on Thursday reported 38.77 per cent jump in its June quarter consolidated net profit at Rs 880.12 crore. 

In the year-ago period was  Rs 634.22 crore, while the same for the preceding March quarter was Rs 953.91 crore.  On a standalone basis, Federal Bank reported 29 per cent rise in net profit at Rs 854 crore.

In a statement, the bank said it expects the loan book to go up to 18 per cent in FY24.

Its core net interest income on a consolidated basis increased 19.57 per cent to Rs 1,918.59 crore during the quarter on the back of a 21 per cent growth in advances and a 0.07 per cent narrowing in the net interest margin at 3.15 per cent.

Its other income came at Rs 732 crore as against Rs 453 crore in the year-ago period, with the core fee income growing to Rs 535 crore from Rs 441 crore.

Bank's chief executive and managing director Shyam Srinivasan told reporters that NIMs have been on a downward trajectory because of the RBI rate hikes, and exuded confidence that the same will go up to 3.30 per cent in FY24.

Srinivasan said the bank generally witnesses slippages of Rs 400-450 crore per quarter, but the same were higher in April-June because of Covid-19 restructured accounts slipping into non-performing assets (NPAs).

Its overall capital adequacy stood at 14.72 per cent as of June 30, and Srinivasan said there is a plan to raise capital in FY24 which it is working on.

The bank has shareholder approval to raise up to Rs 4,000 crore in core capital to fund book expansion, but is yet to take a call on the quantum and the route to be taken.

He said Fedfina, its non-banking lending subsidiary, is reconsidering its plans of coming out with an IPO and is growing well. Federal Bank, which owns 74 per cent of the lender, will continue to be a majority shareholder in it, Srinivasan said.

(With PTI inputs)