Federal Bank Q2 PAT up 11% on strong core income growth
Private sector lender Federal Bank on Monday reported 11 per cent year-on-year (y-o-y) rise in its net profit for the quarter ended September at ₹1,057 crore, led by strong core income growth.
The bank’s net interest income or NII rose 15 per cent y-o-y to ₹2,367 crore, while other income rose to ₹964 crore in Q2FY25 from ₹730 crore a year ago. Net advances of the lender rose 19 per cent y-o-y to ₹2.30 lakh crore,whole total deposits were up 16 per cent y-oy at ₹2.69 lakh crore. Net interest margin, meanwhile, moderated 4 basis points (bps) sequentially to 3.12 per cent in Q2.
Asset quality of the lender improved, with gross and net non-performing asset ratio (GNPA, NNPA) falling by 2 bps and 3 bps sequentially to 2.09 per cent and 0.57 per cent, respectively. However, credit cost—or capital set aside for potential bad loans—rose 3 bps on quarter to 30 bps during Q2.
The bank’s capital adequacy ratio stood at 15.20 per cent as on September end, and the lender plans to raise ₹1,500 crore via infrastructure bonds in H2FY25. Separately, the bank has sold 9 lakh shares of associate entity Equirus Capital during Q2, and a further 2.5 lakh shares on October 1.
“ln a meeting held on October 10, the Bank’s Board of Directors approved the sale of an additional 5,900,000 equity shares held in ECPL (Equirus Capital). Upon completion of this sale, ECPL will no longer be an associate entity of the Bank,” the lender said in an exchange filing. Shares of the bank ended trading 1 per cent lower at ₹184.70 apiece on the BSE today. The lender reported Q2 results post market hours.
| Parameter | Q2FY25 (in ₹ crore) | y-o-y change in % |
|---|---|---|
| Net advances | 2.30 lakh crore | 19 |
| Deposits | 2.69 lakh crore | 16 |
| Net interest margin (in %) | 3.12 | -10 bps |
| Net NPA ratio (in %) | 0.57 | -7 bps |
| Net profit | 1,057 | 11 |