Federal Bank quarterly profit crosses Rs1,000cr mark for first time

KOCHI: As a parting gift to Federal Bank shareholders, Shyam Srinivasan, the bank’s present MD & CEO, succeeded in elevating the quarterly net profit beyond the Rs1,000 crore- mark for the first time, setting a new milestone before his departure.

As another bank chief told businessbenchmark.news, Srinivasan is completing a long tenure of 14 years at the helm of the bank, and is set to step down on September 22 after successfully elevating the bank to a different league.

Highest net profit

As Srinivasan has rightly noted, this quarter has been a quarter where the bank recorded many firsts. The bank has achieved its highest-ever quarterly net profit of Rs1,009.53 crore compared with Rs853.74 crore for the same period last year, representing a year on year (YoY) growth of 18.25 per cent.

However, the sequential increase in net profit was a lower 11.39 per cent over Rs906.30 crore, the bank logged for the last quarter (Q4) of FY24.

While the total business reached Rs4,86,871.33 crore during the first quarter of the current year, the operating profit also reached the bank’s highest ever at Rs1,500.91 crore.

Federal Bank asset quality

The asset quality of the bank has improved with the gross NPA and net NPA settling down at a healthy 2.11 per cent and 0.60 per cent respectively as of June end, 2024.

The net interest income (NII), the real barometer of bank’s lending business, made a smart improvement of 19.46 per cent to Rs2291.98 crore.

The two most accepted efficiency indicators, return on assets (RoA) and return on equity (RoE), stood at 1.27 per cent and 13.64 per cent respectively as of the end of the quarter under review.

Deposits

Deposits increased from Rs2,22,495.50  crore as on  June 30, 2023 to Rs2,66,064.69 crore  as on June 30, 2024. On the asset side, net advances increased from Rs1,83,487.41 crore  as on June 30, 2023 to Rs2,20,806.64 crore as on June 30, 2024.

While retail advances grew by 19.75 per cent to reach Rs70,020.08 crore, business banking advances grew by 20.45 per cent to reach Rs18,159.34 crore. Commercial banking grew by 23.71 per cent to Rs22,687 crore, whereas, corporate advances registered a growth of 12.20  per cent to reach Rs76,588.62 crore during the said period.

Shyam Srinivasan, the outgoing Managing Director & CEO of Federal Bank, said the bank had a resoundingly strong start to FY 25 and delivered its highest ever quarterly profits.

“With an Industry leading growth in both deposits and assets we are gaining share consistently. Our overall focus of dialing up our physical and digital presence is helping us reach a larger footprint across India,” Srinivasan added.

Net worth & CAR

The net worth of the bank increased from Rs22,247.75 crore to Rs30,300.84 crore as on June 30, 2024. Capital adequacy ratio (CRAR) of the bank, computed as per basel III guidelines, stood at 15.57 per cent as at the end of June 30, 2024.