Cost-to-income (CI) ratio falls below 50 pc
KOCHI: Federal Bank, the largest Kerala-based bank, has posted a net profit of Rs266.04 crore for the second quarter ending September 30, 2018, representing a shade increase over that of its preceding quarter as well as the similar quarter in the previous year.
However, the bank generated a smart operating profit at Rs698 crore during the quarter, which was 16 per cent higher sequentially and about 20 per cent more than the operating profit the bank posted for the same quarter last year.
The bank has been able to improve its net interest income (NII) from Rs899 crore to Rs1022 crore, which is the highest NII in the bank’s history.
Quite interestingly, the bank succeeded in bringing down the cost to income ratio (CI) below 50 per cent to 48.15, which was 365 basis points (bps) lower compared with that in the previous quarter.
The non-performing assets (NPA) continues to be an underbelly for Federal Bank, whose gross NPA increased by 11 basis points sequentially to 3.11 per cent, whereas the net NPA increased from 1.72 per cent to 1.78 per cent during the quarter. However, the bank maintains a fairly high provision coverage ratio (PCR) of 63.37 per cent as of September 30, 2018.
The total advances increased by 25.53 per cent whereas the total deposits improved by 21.57 per cent during the period. The retail advances that has proved to be the bank’s strongpoint improved by 20.96 per cent with the strong backing of housing loans that surged by 34.74 per cent.
The net worth of the bank increased from Rs11,647.32 crore to Rs12,440.11 crore, as on September 30, 2018. The capital adequacy ratio (CRAR) of the bank, computed as per Basel III guidelines stood at 13.29 per cent as of the end of the quarter under review.