Federal Bank Q4 Results: Net profit rises 67% YoY to Rs Rs 903 crore on retail loan growth

Private sector lender Federal Bank on Friday reported a 67% rise in net profit for the March quarter backed by steady expansion in retail and business loans.

The net profit for the quarter was at Rs 903 crore against Rs 541 crore in the year-ago period. Net interest income rose 25% year-on-year to Rs 1525 crore, helping to offset the impact of higher provisions at Rs 117 crore against Rs 75 crore. Total income grew 38% at Rs 5455 crore

A key profitability ratio, the net interest margin for the period, rose to 3.17% from 2.96% a year back. Its return on equity was at an all-time high of 17.48%.

"NIM should remain around 3.30% in the coming quarters," managing director Shyam Srinivasan said. He said while credit growth is expected to remain steady at around 18-20% in FY24, backed by corporate's working capital demand, challenges continue in terms of mobilising deposits.

The bank's total advances rose 20% year-on-year to Rs 1.77 lakh crore. Deposits grew 17% at Rs 2.13 lakh crore.

The lender has its quarterly operating profit grown 67% at Rs 1335 crore, which is its highest ever quarterly number.

The lender's asset quality improved with gross non-performing assets ratio falling to 2.36% at the end of March as compared with 2.80% a year back. Net NPA was at 0.69% against 0.96%. Capital adequacy ratio stood at 14.81%.

The bank board recommended a dividend of 50% per equity share having face value of Rs 2 for FY23.

Srinivasan said that although challenges remain in garnering deposits, the likelihood of further deposit rate rise is minimal unless the Reserve Bank of India raises the repo rate further.