Private sector lender Federal Bank’s posted 26.2 per cent drop in net profit at Rs 307.6 crore for the second quarter ended September 2020 (Q2FY21). This is primarily due to the sharp rise in provisions and contingencies.
It had posted a profit after tax (PAT) of Rs 416.7 crore in the quarter ended September 2019 (Q2FY20). Sequentially, it had posted a net profit of Rs 400.77 crore in first quarter ended June 2020 (Q1FY21). The bank’s stock was trading at 2.03 per cent lowerhigher at Rs 52.80 per share on the BSE.
Net interest income grew 23 per cent year-on-year (YoY), to Rs 1,380 crore in Q2Fy21. Other income, comprising fee and commission, grew by 21 per cent to reach Rs 509 crore in Q2FY21, according to filing with BSE.
The provisions (factoring in non-performing assets, or NPAs) and contingencies more than doubled to Rs 592.06 crore in Q2FY21, from Rs 251.77 crore in Q2FY20. According to the lender, the provision coverage ratio, including technical write-offs, of Federal Bank stood at 78.34 per cent at the end of September 2020. The PCR was 75.09 per cent in June 2020.
The asset quality of the bank improved during the quarter. The gross NPAs declined to 2.84 per cent in Q2FY21, from 3.07 per cent in Q2 FY20. The GNPAs were at 2.96 per cent at end of Q1FY21. The net NPAs were at 0.99 per cent in September 2020, down from 1.59 per cent in September 2019. Its net NPAs were at 1.22 per cent in June 2020 (Q1Fy21).
The capital adequacy ratio stood at 14.64 per cent as of September 30, 2020.