Federal Bank Q3 net profit rises 54%, asset quality improves

Federal Bank on Monday reported its standalone net profit at ₹803.6 crore during the third quarter ended December 2022 for the current fiscal or Q2 FY23, up 54% as compared to ₹521.7 crore in the same quarter in the previous fiscal. Shares of Federal Bank were trading nearly a per cent higher at ₹139 apiece on the BSE in afternoon deals.

Federal Bank said it reported highest ever net profit at ₹803.6 crore whereas it posted a highest ever operating profit at 1274.21Cr, witnessing a growth of 39% from the year ago quarter.

The lender's net interest income (NII), which is the difference between the interest earned and expended, rose 27% to ₹1,956 crore as compared to ₹1,539 crore year-on-year (YoY).

Its provisions (other than tax) and contingencies slipped to ₹198.7 crore versus ₹267.8 crore QoQ and from ₹213.9 crore YoY. Its Provision Coverage Ratio (PCR) was up by 178 bps to 69.19%.

Meanwhile, its asset quality during the quarter under review improved slightly as gross non-performing assets (NPAs) stood at 2.43% from 2.46% quarter-on-quarter (QoQ) whereas net NPAs came down to 0.73% from 0.78% in the previous quarter of September 2022.

As per the lender, the GNPA at 2.43% was the lowest in 21 quarters, whereas its net NPA at 0.73% was the lowest in 8 quarters.

Further, Federal Bank's net interest margin or NIM rose to 3.49% during the December 2022 quarter, higher by 22 basis points (bps) YoY and 19 bps QoQ. Its loan growth was at 4.3% QoQ 17.1% from the year ago quarter.

Earlier this month, Federal Bank had said that its total deposits crossed ₹2,00,000 crore milestone, reaching ₹2,01,425 crore, with a growth of 14.8% over ₹1,75,432 crore as of December 31, 2021.