Federal Bank Q3 profit jumps 26% to Rs 260 crore

MUMBAI: Federal Bank reported a net profit of Rs 260 crore in the quarter ended December 2017, up 26 per cent from Rs 206 crore in the corresponding quarter a year earlier, driven by 22 per cent growth in loans, which helped the bank tide over lower treasury income.

The profit was slightly higher than the Rs 258 crore projected by a Bloomberg poll and was led by a 20% growth in net interest income (NII) which increased to Rs 950 crore from Rs 791 crore a year ago.

“This was a record quarter in terms of NII and it reflects the strength of the bank’s franchise and out diversified portfolio. Housing loans grew at 26% and other loans which are a small part of our portfolio like auto and personal loans also grew quickly,” said Shyam Srinivasan, CEO at Federal Bank.


Other income of the bank dropped to Rs 229 crore from Rs 275 crore a year earlier mainly due to a sharp fall in trading income as government bond yields rose during the quarter. Trading in the for the bank almost halved to Rs 58 crore from Rs 110 crore a year earlier.

Gross non performing assets of the bank dropped to 2.52% from 2.77% a year earlier, though it was higher than the 2.39% reported in the quarter ended September. Federal Bank had to classify Rs 71 crore of education loans as NPAs during the quarter after a loan waiver granted by the state government in Kerala.

The bank also added Rs 98 crore of corporate NPAs but the NPA rise was more than made up by the Rs 220 crore recovery and upgrades in the quarter, double from the Rs 110 crore recovery and upgrades in the same period a year earlier.