Federal Bank Faces 15% Profit Dip Amid Margin Squeeze and Rising Bad Assets

Federal Bank reported a 15% decline in net profit for the June quarter, impacted by margins compression and rising bad assets. Despite a 9% credit growth, narrowing NIMs and increased provisions affected profits. Management anticipates improved performance in the latter fiscal year with expected credit growth.

Federal Bank's net profit took a 15% hit in the June quarter, attributed largely to compressed margins and an increase in bad assets, leading to higher provisions.

Despite a credit growth of 9%, the private sector bank saw its net interest margin (NIM) dip to 2.94%, affecting core income.

Bank officials anticipate better performance in the fiscal year's second half, with projected credit growth of 12-13% and NIM improvement, citing an expected decrease in microfinance slippages.