BIZ-RESULTS-LD-FEDERAL BANK

South-based Federal Bank Thursday

reported a 28.31 per cent uptick in December quarter net at Rs

333.63 crore on a rise in non-core income.

The private sector lender had reported a post tax

profit of Rs 260 crore in the year ago period.

Its core net interest income went up by 13.40 per cent

to Rs 1,077.29 crore on back of a dip in net interest margin

to 3.17 per cent as compared to 3.3 per cent in the year-ago,

even though the loan growth came at 24.61 per cent growth.

Its managing director and chief executive Shyam

Srinivasan explained even though the margins are down as

compared to last year, it is steadily moving up over the last

three quarters.

The non-interest income for the bank moved up by over

51 per cent to Rs 345 crore from the Rs 228.63 crore on the

back of a healthy rise in the trading gains as the yields went

down amid expectations of pause in rate hikes or cuts as well.

However, the drop in yields resulted in a Rs 30 crore

jump in provisions towards pensions, its executive director

Ashutosh Khajuria told reporters.

The overall provisions moved up to Rs 190.12 crore

from the year-ago's Rs 162 crore and Srinivasan added that the

bank has upped the buffers for two bad assets resulting in the

overall provisioning coverage ratio moving up to 68 per cent.

The bank is targeting to continue raising the PCR and

take it up to 70 per cent in a year's time.

Its slippages during the quarter came at Rs 426 crore,

which is Rs 60 crore lower than the preceding quarter, while

the management said that the entire impact of the Kerala

floods has been factored in.

Srinivasan said the RBI's special dispensation for

MSMEs announced earlier this month has the potential to reduce

its slippages by up to Rs 120 crore.

The gross non-performing assets ratio moved up to 3.14

per cent from the 2.52 per cent.

Newer segments for the bank, like personal loans, auto

loans and home loans grew at a faster clip on a lower base,

while the ones to corporates were up by 30 per cent fuelled by

working capital demand.

Srinivasan said the bank has reduced its exposures to

the troubled non bank lending segment by Rs 500 crore by not

renewing loans, which has seen the sector's contribution to

the overall loan book decline to 10 per cent from the earlier

12 per cent level.

He said the bank does not have any exposure to the

troubled carrier Jet Airways, and added that the one to IL&FS

is limited to three loans totalling Rs 245 crore given to

special purpose vehicles which is performing well.

Investors were not enthused with the bank's numbers

and the scrip shed 3.01 per cent to close at Rs 88.65 a piece

on the BSE as against gains of 0.15 per cent on the benchmark.

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(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)