Federal Bank Q3FY23: The bank reported its superlative figures in net profit of ₹804 crore in the third quarter ending December 31, 2022, on the back of strong net interest income figures. Net profit rose 54% on-year from Rs 522 crore during the corresponding quarter a year ago.
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Net Interest Income ( NII) was ₹1,957 crore in the quarter reported, up 14.2 percent on the Quarter-on-Quarter basis and 27% higher on-year than Rs 1539 crore.
The profit after tax rose 54.03 percent on-year, advantaged by an increase of 27.14 percent in the NII and a dip in provisions. The net interest margin (NIM) stood at 3.49 percent, up 22 bps YoY.
Provisions and contingencies decreased 7.1 percent to Rs 198.69 crore against Rs 213.98 crore a year ago and 2582 percent down from Rs 267.86 crore in the September quarter.
“An all-round strong operating performance has helped us deliver the highest-ever quarterly profit of ₹804 crore. Broad-based asset growth of 19 percent, coupled with core revenue profile, has yielded a higher ROA, currently at 1.33 percent,” said MD and CEO Shyam Srinivasan.
The private lender posted an increase of 19.08 percent YoY in its advances to ₹1.7 lakh crore, with retail advances registering 18.1 percent growth, agriculture advances advancing 19.7 percent, business banking loans rising 18.00 percent, and commercial banking loans 18.4 percent.
Overall corporate advances grew 19.1 percent at ₹62,183 crore as of December 31.
MD CEO Srinivasan said he expects the loan growth momentum to continue in Q4 FY23, maintaining the loan growth guidance of 17-18 percent for FY23. In addition, in the coming quarter, NIMs will be over 3.30%, and the bank is tailing 17-18% credit growth as it had guided towards FY23.
As of December 31, the bank currently has a market share of 1.26 percent in advances and 1.12 percent in deposits.
Fresh slippages stood at ₹398 crores, partly offset by recoveries and upgrades of ₹287 crores. The bank wrote off loans worth ₹8 crores during the quarter.
The gross NPA ratio for the quarter under consideration dropped to a 21-quarter low at 2.43 percent. It was 2.46 percent a quarter ago and 3.06 percent a year ago.
The Net NPA ratio improved to 0.73 percent from 0.78 percent QoQ and 1.05 percent YoY. It was the lowest in 8 quarters.
Deposits of the bank increased 14.8 percent YoY to Rs 2.0 lakh crore.
The bank opened 60 new branches in the first three-quarters of FY23, taking the total tally to 1,333. Mr. Srinivasan said the bank plans to add 20 new branches in the last quarter of FY23.
Srinivasan added that the bank would hire over 1,000 employees each in FY23 and FY24.