Kochi: Federal Bank posted an 11 per cent increase in net profit for the September 2024 quarter, rising to Rs1,057 crore from Rs954 crore in the previous year.
Total income surged by 22 per cent to Rs7,541 crore, compared with Rs6,186 crore in the same quarter last year, the bank disclosed in a regulatory filing.
The bank’s interest income also showed strong growth, climbing to Rs6,577 crore, up from Rs5,455 crore year-over-year. Net interest income (NII), a key profitability indicator, rose 15 per cent to reach Rs2,367 crore, compared with Rs2,056 crore in Q2 of the prior fiscal year.
Asset quality
Asset quality improvements were evident, with the gross non-performing assets (NPA) ratio decreasing to 2.09 per cent of total loans from 2.26 per cent a year ago.
The net NPA ratio also moderated to 0.57 per cent, down from 0.64 per cent in the corresponding quarter last year, reflecting improved loan management and the net NPA ratio could be one of the best among Indian banks, according to banking analaysts.
The bank’s net worth rose substantially, from Rs26,032 crore to Rs31,108 crore as of September 2024.
Despite this growth, the Capital Adequacy Ratio (CAR) dipped slightly to 15.20 per cent from 15.50 per cent in the same quarter of the previous fiscal, suggesting a balanced yet cautious approach to capital management amid expansion.
Strong momentum
KVS Manian, MD & CEO of Federal Bank, said the Q2 has been robust for the bank, driven by strong momentum across diverse operational verticals.
“This is clearly reflected in our consecutive surpassing of the Rs1000 crore net profit milestone for two quarters in a row. Our deposits, now upgraded to AAA by CRISIL, signify a sturdy core of the franchise,” Manian added.
Business momentum across verticals has been strong and inclusive, and asset quality improvements have been notable for Federal Bank in the second quarter. “We are committed to sustaining and building on this strong momentum to achieve continued success for the bank,” the bank CEO, who took the reins of the bank last month, said,
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