A Federal Bank branch. File photo
Private lender Federal Bank’s net profit jumped 25 times to Rs 257 crore for the quarter ended March (Q4) on healthy growth in net interest income (NII) and dip in provisions for stressed assets.
The Kerala-based bank had posted net profit of mere Rs 10 crore for Q4 of 2015-16.
Its profit for 2016-17 rose by 74 per cent to Rs 830 crore from Rs 475 crore for 2015-16.
The board recommended 45 per cent dividend per share (face value Rs 2 each) for 2016-17, up from 35 per cent in 2015-16.
The market-beating results by Federal Bank saw its stock spurt 13.6 per cent to Rs 107.5 on BSE on Friday.
Its NII rose 23 per cent to Rs 842 crore in Q4 from Rs 686 crore in Q4 of FY16.
Shyam Srinivasan, its managing director and chief executive, said regularity in credit growth and fall in cost of funds due to demonetisation helped clock healthy growth in NII.
The net interest margin for Q4 improved to 3.42 per cent from 3.31 per cent in Q4FY16. Bank has given guidance of 3.25 per cent for NIM in FY18.
The gross non-performing assets (NPAs) stood at 2.33 per cent of loans in March 2017, lower than 2.84 per cent a year ago.
The net NPAs also declined to 1.28 per cent in March 2017 from 1.64 per cent a year ago.
Total provisions declined 24 per cent to Rs 293 crore from Rs 382 crore.
The provision coverage ratio (including technical write-offs) stood at 71.75 per cent.
The capital adequacy ratio (CAR) was 12.39 per cent, with Tier-I of 11.81 per cent at end of March 2017. Bank board has cleared a proposal to raise equity capital up to Rs 2,500 crore through various instruments.
Srinivasan said the bank would keep CAR 200 basis points above regulatory threshold and that the lender plans to raise equity capital in the current financial year after shareholders’ nod.