Bank stock closed 2.35 per cent higher at Rs 93.8 per share on BSE.
Its net interest income (NII), which is interest earned less interest expended, for reporting quarter rose by 7.2 per cent to Rs 1,155 crore from Rs 1077 crore in same quarter last year. However, the net interest margin (NIM) for the quarter dipped to 3 per cent for the reporting quarter from 3.17 per cent in Q3Fy19. The NIM for the current financial year are expected to be about 3.08 per cent, said its managing director and chief executive Shyam Srinivasan said.
There was reversal of interest reversal of income for two housing finance company (HFCs) accounts which slipped into non-performing asset category.
The non-interest revenue (other income) grew by 17.34 per cent to Rs 408 crore for the quarter as against Rs 346 crore in Q3Fy19.
Bank said provisions, including those for bad loans declined to Rs 160.86 crore in Q3Fy20 from Rs 190.12 crore in same period last year. The provisions burden was down despite two HFCs accounts were treated as NPA.
Bank had already made higher standard asset provisions of 15 per cent in second quarter and had to raise that to 25 per cent in the quarter for these HFCs. Thus incremental obligation was small, he said.
The asset quality improved pressure as Gross Non-performing assets (NPAs) declined year-on year basis and sequentially. GNPAs were lower at 2.99 per cent in December 2019 from 3.14 per cent in December 2018. The Gross NPAs stood at 3.07 per cent in September 2019.
Referring to business performance, bank said its advances rose by 12.95 per cent to Rs 1,19,222 crore. The retail loans grew by 23.02 per cent to Rs 36,550 crore. The Bank has guided for 15-16 per cent growth in advances for Fy20. The loan mix showed retail share of 51 per cent while that of wholesale was 49 per cent.
Federal Bank’s deposits grew by 17.12 per cent to Rs 1,44,591 crore at end of December 2019. The share of low cost – current account and savings deposits (CASA) – in total deposits declined to 31.46 per cent as of December 31, 2019 from 33.35 per cent a year ago.
The Bank’s total Capital Adequacy Ratio (CAR) as per Basel III guidelines was at 13.64 per cent as on December 31, 2019 (12.97 per cent as on December 31, 2018). Its Tier 1 Capital ratio (tier -1) was at 12.62 per cent as of December 31, 2019.
Bank’s capital position to support business growth is comfortable and would take a call on raising fresh capital (equity) at end of third or fourth quarter of next financial year (Fy21), Srinivasan said.