Federal Bank Q2 net profit rises 35% to Rs. 954cr
Federal Bank has achieved its highest ever quarterly net profit of Rs. 953.84 crore, jumping 35.54% YoY in the quarter ended September 2023, compared to Rs. 703.7 crore during the same period last year. The bank's net interest income (NII) also saw impressive growth, rising 16.7% to Rs. 2,056.4 crore from Rs. 1,761.8 crore year-on-year. Federal Bank's Managing Director & CEO, Shyam Srinivasan, credited the strong Q2 results to the successful execution of various initiatives and investments.
Stable asset quality and declining provisions
The bank's asset quality remained steady during the quarter, with gross non-performing assets (GNPA) improving to 2.26% at the end of Q2 FY23 from 2.38% in Q1FY24. Moreover, net non-performing assets (NPA) dipped to 0.64% from 0.69% quarter-on-quarter (QoQ). Provisions for the quarter dropped to Rs. 43.9 crore from Rs. 267.9 crore YoY and Rs. 155.6 crore QoQ, while slippages were at Rs. 373 crore compared to Rs. 501 crore QoQ.
Growth in deposits and advances
Federal Bank saw an increase in total deposits from Rs. 1.89 lakh crore on September 30, 2022, to Rs. 2.32 lakh crore on September 30, 2023. On the asset side, net advances also grew from Rs. 1.61 lakh crore on September 30, 2022, to Rs. 1.92 lakh crore on September 30, 2023.
Outlook and market response
Looking ahead with optimism for the rest of the year, Srinivasan, expressed confidence in the bank's ability to grow between 18-20%, according to CNBC-TV18. Despite the remarkable Q2 results, Federal Bank shares were trading 0.60% lower at Rs. 148.50 apiece on the National Stock Exchange (NSE) at the time of writing.
