Federal Bank Reports Highest-Ever Quarterly Net Profit of Rs 4.8 bn

Helping You Build Wealth With Honest Research
Since 1996. Try Now

  • MyStocks

MEMBER'S LOGINX

     
Login Failure
   
     
   
     
 
 
 
(Please do not use this option on a public machine)
 
     
 
 
 
  Sign Up | Forgot Password?  
  • Home
  • Views On News
  • May 18, 2021 - Federal Bank Reports Highest-Ever Quarterly Net Profit of Rs 4.8 bn

Federal Bank Reports Highest-Ever Quarterly Net Profit of Rs 4.8 bn

May 18, 2021

Kochi-headquartered Federal Bank on Monday reported nearly 59% jump in its standalone net profit at Rs 4.8 bn for the quarter ended March.

The bank had posted a net profit of Rs 3 bn in the same quarter of fiscal year 2019-20.

The profit was higher sequentially also against Rs 4 bn in December 2020 quarter.

Total income on a standalone basis, however, was down at Rs 38.3 bn in Q4FY21, as against Rs 41.1 bn in the corresponding quarter of FY20.

For the full year FY21, the standalone net profit of the lender grew by 3% to Rs 15.9 bn. Income during the year was also higher at Rs 157 bn, as against Rs 151.4 bn in FY20.

On a consolidated basis, the net profit in the reported quarter jumped by 65% to Rs 5 bn.

However, total income fell by 5.4% to Rs 40 bn in Q4FY21, from Rs 42.2 bn in the year-ago quarter.

The bank delivered an annual operating profit of Rs 37.9 bn as on 31 March 2021 against Rs 32 bn as on 31 March 2020, registering a growth of 18.2%.

The total business of the bank reached Rs 3 tn as on 31 March 2021 from Rs 2.7 tn as on 31 March 2020, registering a growth of 10.91%.

Federal Bank's Net Income and Margin Increases

Annual net interest income (NII) increased from Rs 46.5 bn to Rs 55.3 bn registering a growth of 19% as on 31 March 2021, while the quarterly NII increased to Rs 14.2 bn, up 17% from Rs 12.2 bn as on 31 March 2020.

The other income dipped to Rs 4.7 bn as against Rs 7 bn in the year-ago period, largely because of a Rs 1.8 bn gain on investments booked in the year-ago period.

Net interest margin (NIM) stood at 3.2% for FY21 while the quarterly NIM stood at 3.2%.

Key Financial Indicators

Particulars (Rs in bn) Q4FY21 Q4FY20 Growth FY21 FY20 Growth
Net Profit 4.8 3 59% 15.9 15.4 3.1%
Operating Profit 8.9 9.6 -8% 37.9 32 18.2%
Net Interest Income 14.2 12.2 17% 55.3 46.5 19%
Data Source: Investors Presentation

Company's Credit and Deposit Growth

Gross advances reached Rs 1.3 tn for the year ended 31 March 2021, compared to Rs 1.2 bn reported in the last year, registering a growth of 8.6%.

Retail advances grew by 18.6% to reach Rs 449.1 bn as on 31 March 2021 from Rs 378.8 bn as on 31 March 2020.

Gold loans registered a staggering growth of 70.1% to reach Rs 158.2 bn for the fiscal year 2021. Business Banking advances grew by 12.9% to reach Rs 118.9 bn.

For the financial year 2021, deposits recorded a growth of 13.4% to reach Rs 1.7 tn, compared to Rs 1.5 tn in FY20.

The current account and savings account (CASA) deposits reached Rs 583.7 bn as on 31 March 2021. CASA Ratio stands at 33.8%.

The non-residential external (NRE) deposits of the bank posted a growth of 11.8% during the year to reach Rs 639.7 bn.

Asset Quality Deteriorates

The gross non-performing assets (NPAs) of the lender deteriorated to 3.4% of the gross advances by the end of March 2021, as against 2.8% by the end of the same month a year ago.

In value terms, the gross NPAs or bad loans rose to Rs 46 bn, as against Rs 35.3 bn in the year-ago period.

However, the net NPAs showed improvement at 1.2% (Rs 15.7 bn), as against 1.3% (Rs 16.1 bn).

The provisions for bad loans and contingencies in March quarter of 2020-21 was down at Rs 2.4 bn, from Rs 5.7 bn parked aside in the year-ago quarter.

Federal Bank's Mr Shyam Srinivasan, Managing Director & CEO, said that the bank had provided money for doubtful loans since the onset of the pandemic in an accelerated fashion, even while they were classified as standard assets on the books during the period of moratorium.

With the clarity provided by the supreme court, the gross non-performing assets ratio increased to 3.4% as against 2.8% in March 2020, but the provisions did not.

In a statement, the official said the money was transferred from standard assets provisioning to credit provisioning with the recognition of the bad loans, which resulted in a dip in provisioning for the quarter.

The overall slippages in FY21 were almost the same as FY20 at over Rs 18 bn but the bank set aside Rs 15 bn in provisions against such assets in FY21 as against Rs 10 bn in the fiscal year before.

Mr Srinivasan further added that the bank will continue to set aside money as and when it sees stress building up in the book as part of regular business operations.

Note that the bank will target to maintain the provision coverage ratio at 65%.

Equity Dividend

The board of directors at its meeting held on 17 May 2021 has recommended a dividend of 35% per equity share having face value of Rs 2 each for the year ended 31 March 2021.

The dividend will be paid after the approval of shareholders at the annual general meeting.

Federal Bank's Shareholding Pattern as on 31 March 2021

Rakesh Jhunjhunwala's Stake in Federal Bank

As per the BSE data available at bseindia.com, Rakesh Jhunjhunwala holds 2.4% of the net Federal Bank shares as on 31 December 2020.

How the Stock Markets Reacted to Federal Bank Q4FY21 Numbers Today

Shares of Federal Bank opened the day at Rs 84 on the BSE and the NSE.

Federal Bank share price closed at Rs 84.4 (up 3.3%) on the BSE and Rs 84.4 (up 3.4%) on the NSE.

At its current price, it is trading at a P/E of 11.5.

The share also touched its 52-week high of Rs 92.4 and 52-week low of Rs 36.9 on 4 March 2021 and 22 May 2020, respectively

Over the last 30 days, the Federal Bank share price is up 11.7%. Over the last one year, the company's share price is up 86.7%.

About Federal Bank

Federal Bank Limited is one of the major Indian commercial banks in the private sector headquartered at Aluva, Kerala.

The Bank operates in four segments: treasury operations, wholesale banking, retail banking, and other banking operations.

Treasury operations include investment and trading in securities, shares, and debentures.

Its products and services include working capital, term finance, trade finance, specialized corporate finance products, structured finance, foreign exchange syndication services, and electronic banking requirements.

The bank has 1,272 branches 1,948 ATMs and cash recyclers as on 31 December 2020.

Federal Bank also has its representative offices in Abu Dhabi and Dubai and an IFSC Banking Unit (IBU) in Gujarat International Finance Tec-City (GIFT City).

For more details about the company, you can have a look at Federal Bank factsheet and quarterly results on our website.

You can also compare Federal Bank with its peers.

Federal Bank vs ICICI Bank

Federal Bank vs IDBI Bank

Federal Bank vs City Union Bank

And to know what's moving the Indian stock markets today, check out the most recent share market updates here.

Equitymaster requests your view! Post a comment on "Federal Bank Reports Highest-Ever Quarterly Net Profit of Rs 4.8 bn". Click here!

  

More Views on News

FEDERAL BANK Announces Quarterly Results (1QFY22); Net Profit Down 13.6% (Quarterly Result Update)

Jul 26, 2021 | Updated on Jul 26, 2021

For the quarter ended June 2021, FEDERAL BANK has posted a net profit of Rs 4 bn (down 13.6% YoY). Sales on the other hand came in at Rs 35 bn (down 1.3% YoY). Read on for a complete analysis of FEDERAL BANK's quarterly results.

FEDERAL BANK Announces Quarterly Results (3QFY21); Net Profit Down 8.3% (Quarterly Result Update)

Jan 21, 2021 | Updated on Jan 21, 2021

For the quarter ended December 2020, FEDERAL BANK has posted a net profit of Rs 4 bn (down 8.3% YoY). Sales on the other hand came in at Rs 35 bn (up 3.9% YoY). Read on for a complete analysis of FEDERAL BANK's quarterly results.

PNB Reports an Over Three-Fold Jump in Net Profit as Provisions Fall (Views On News)

Aug 3, 2021

The reduction in provisions for bad loans and asset quality stability may have aided the lender's earnings.

Here's Why IndusInd Bank's Net Profit Doubled in the June Quarter (Views On News)

Jul 28, 2021

All you need to know about the latest quarterly results of IndusInd Bank.

Axis Bank's Stock Falls as Results Disappoint on Asset Quality (Views On News)

Jul 27, 2021

Axis Bank's net profit more than doubles on a spike in other income and lower provisioning.

More Views on News

Most Popular

All You Need to Know About Primary and Secondary Markets

A look at the various types of primary and secondary markets and the key differences between them.

5 Specialty Chemical Stocks that Turned Multibaggers in One Year (Views On News)

Sep 17, 2021

These specialty chemical stocks have surged 200% or more in the last year. Do you own any?

A Rare Buying Opportunity in an Exciting Stock (Profit Hunter)

Sep 16, 2021

Whether agriculture sector goes through a structural transformation or not, this agrochemical stock has a good chance of winning.

5 Indian Companies with Over 7% in Dividend Yield (Views On News)

Sep 17, 2021

These stocks will give you better yields than bank deposits.

A Great Time to Buy ITC (Profit Hunter)

Sep 17, 2021

Is the worst over for the stock of ITC?

More

Become A Smarter Investor
In Just 5 Minutes

Multibagger Stock Guide 2021
Get our special report Multibagger Stocks Guide (2021 Edition) Now!
We will never sell or rent your email id.
Please read our Terms

FEDERAL BANK SHARE PRICE


Sep 24, 2021 (Close)

TRACK FEDERAL BANK

  • Track your investment in FEDERAL BANK with Equitymaster's Portfolio Tracker. Set live price alerts, get research alerts and more. Get access now...
  • Add To MyStocks

FEDERAL BANK 8-QTR ANALYSIS

COMPARE FEDERAL BANK WITH

MARKET STATS