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Federal Bank on Wednesday posted an 8 per cent decline in net profit at Rs 404.10 crore for the third quarter ended December 2020, mainly due to higher provisioning for bad loans.
The private sector lender had registered a profit of Rs 440.64 crore in the year-ago period.
Total income, however, improved to Rs 3,941 crore during the third quarter as against Rs 3,738.22 crore a year ago, Federal Bank said in a regulatory filing.
Gross non-performing assets (NPAs) declined to 2.71 per cent of the total advances during the quarter, compared to 2.99 per cent at the end of the third quarter of 2019-20 and 2.84 per cent in the September quarter.
Net NPAs of the bank also fell to 0.6 per cent of the total assets in October-December 2020 as against 1.63 per cent a year ago and 0.99 per cent in the September quarter.
Despite the decline in bad loans, provisions other than tax and contingencies increased more than two-fold to Rs 420.62 crore as against Rs 160.86 crore during the same period last fiscal.
Today, the company’s scrip on NSE was trading 1.46 per cent higher at Rs 76.50.
The bank said it is likely to restructure 1 per cent-1.5 per cent of the loan book as compared to an earlier estimate of 3 per cent. “We remain well-capitalized, have no immediate plans to raise capital,” a bank official said. Shyam Srinivasan, MD & CEO, Federal Bank said business banking, gold, and retail banking all are tracking well and expect flat credit growth in the corporate segment.
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