Mumbai: South-based Federal Bank Saturday reported a 163 per cent jump in March quarter net at Rs 381 crore, boosted by lower provisions which halved in the absence of a one-time hit taken last year, and also a better asset quality.
Impact of the RBI circular of February 12, now struck down by the apex court, had led the bank to report a profit of Rs 144 crore in the year-ago period.
For the full fiscal, the Kochi-based bank reported its highest-ever net profit of Rs 1,282 crore against the Rs 909 crore year ago.
Overall provisions plunged more than 60 per cent to Rs 177.76 crore from Rs 371.53 crore.
An improvement in the asset quality also led to a dip in provisions, managing director and chief executive Shyam Srinivasan told reporters here, adding the slippages were lower than the recoveries and upgrades during the quarter.
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Slippages came down to Rs 256 crore against the average of Rs 400 crore in the recent quarters, while the recoveries and upgrades were Rs 323 crore.
The core net interest income improved 17.50 per cent to Rs 1,096.53 crore on a 20 per cent growth in advances and net interest margin being stable at 3.17 per cent.
Non-interest income grew at a faster 31.05 per cent to Rs 411 crore, and chief financial officer Ashutosh Khajuria attributed it to higher forex fees, third-party distribution and higher loan processing fees.
The bank is targeting a similar 20-22 per cent credit growth in FY20, Srinivasan said, adding it expects the credit costs to improve marginally to 0.55-0.60 per cent from 0.68 per cent in FY19.
Retail loans grew 30 per cent across all segments and the bank is confident of maintaining the momentum courtesy the newer segments it has entered, Srinivasan said.
He said its product suite is much better and extra focus will be given to transaction banking and cash management services next fiscal. The bank has already hired some senior hands to do this, he added.
The bank does not have any exposure to either the grounded Jet Airways or the financially troubled companies of Subhash Chandra-led Essel Group.
On the future of its life insurance joint venture with IDBI Bank, which has now been taken over by life insurance behemoth LIC, Srinivasan said the partner has to decide on when it plans to exit the venture as per mandatory requirements.
He underlined that the company is doing well and there is no need to look at any exit for the bank.
