Curb on slippages, disciplined recoveries boost bottom line
Board recommends 70 per cent cash dividend
KOCHI: Federal Bank, the largest Kerala-based bank by far, has staged an outstanding performance for the financial year ended March 31, 2019 backed by highest-ever annual and quarterly profits with Q4 net profit jumping 163.13 per cent to Rs381.51 crore and full-year net earnings growing 41.54 per cent to Rs1243.89 crore.
The board of directors at its meeting held on Saturday (May 4) has recommended a dividend of 70 per cent amounting to Rs1.40 per equity share with face value of Rs2. The dividend will be paid after the approval of shareholders at the annual general meeting (AGM).
Commenting on the results and financial performance, Shyam Srinivasan, Managing Director & CEO of the bank, said the Federal Bank has once again delivered a robust operating performance, founded firmly on the strong growth momentum in both credit and liabilities.
“The tight performance of the bank on the slippage front along with disciplined recovery has contributed significantly towards meeting the objectives of the quarter. Overall, it is an encouraging set of numbers,” added Srinivasan.
In fact, the performance of the corporate/wholesale banking has boosted the bottom line of the bank by adding a profit before tax (PBT) to the tune of Rs256.69 crore against a loss (before tax) of Rs137.97 crore for previous year.
That said, the contribution of retail banking to the bottom line of the bank eclipses the other business segments. The profit before tax (PBT) from the retail banking for the period under review was to the tune of Rs1201.86 crore, and bank has expanded the retail banking portfolio by more than Rs11,000 crore during the year.
While the deposits recorded a growth of 20.50 per cent to reach Rs1,34,954.34 crore, the total assets of the bank expanded from Rs1,38,313.95 crore to Rs1,59,339.99 crore during the year.
During the year, the asset quality improved substantially with the gross NPA having fallen to 2.92 per cent and the net NPA settling at a lower 1.48 per cent when the financial year closed on March 31, 2019.
The retail advances recorded a growth of 24.79 per cent, whereas the auto loans grew by 62.04 per cent and the personal loans by a whopping 143.08 per cent during the period under review.
The fourth quarter saw the cost to income (CI) ratio falls by 286 basis points to 49.96 per cent year on year. The bank succeeded in recording recoveries/upgrades of Rs963 crore during the year against a target of Rs800 crore.