25
August 2019 - 2:59 pm IST

Bank

Federal Bank net zooms over 46% on fee income, stable assets

Federal Bank net zooms over 46% on fee income, stable assets

Published:16 July 2019

Mumbai | Private sector lender Federal Bank Tuesday reported a 46.25 percent jump in June quarter net at Rs 384.21 crore on a healthy growth in non-crore income and stable asset quality.
The Kochi-based lender reported a 17.77 percent growth in core net interest income at Rs 1,154 crore on a 19 percent growth in advances, and a stable net interest margin which stood at 3.10 percent.
Boosting the bottomline, other income clipped 44.55 percent to Rs 391.52 crore, and managing director and chief executive Shyam Srinivasan attributed this to broader growth across the core fee lines and also on treasury operations.
The bank saw fresh slippages of Rs 415 crore during the quarter, including Rs 32 crore to two special purpose vehicles of the crippled infra lender IL&FS, while the overall recoveries rose to Rs 300 crore.
The gross non-performing assets ratio stood at 2.99 percent as against 3 percent in the year-ago period, while net NPA ratio improved to 1.49 from 1.72 in the March quarter.
About the exposure to the troubled mortgage lender DHFL, Srinivasan declined to name the account but said its exposure to certain accounts is standard.
The bank's overall exposure to the troubled non- banking lenders segment stood at 13 percent of the loans, which is almost the same as March, said Srinivasan, adding much of this is to well-performing companies.
Despite not rulign out some reverses in asset quality, Srinivasan said the bank is maintaining its credit cost guidance at 0.63 percent for the entire fiscal.
He said rather than taking sectoral calls on exercising caution, the bank is looking at every company at individually and will continue to be wary about lending to long gestation and capital intensive sectors.
The largest private sector bank in Kerala expects a reduction in the cost of funds as the year progresses, which will widen the net interest margin to 3.20 percent for the fiscal year.
The bank posted a healthy 25 percent loan growth in the retail segment driven by home loans, loans against property, personal loans and auto loans, Srinivasan said, and attributed high growth in auto and personal loans to the low base last year.
To a question on the NBFC portfolio buys, he said it did a transaction of Rs 150 crore during the quarter and will be opportunistic on the same going forward.
The bank counter closed 0.70 percent up at Rs 107.35 on the BSE, in line with a 0.60 percentage points gains on the benchmark.


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