Federal Bank’s profitability tanks due to increment of provisions in Q4FY16
DSIJ Intelligence / 02 May 2016
Federal Bank has announced its Q4FY16 results on April 29. The bank’s total earned interest has increased by 6.5 per cent to Rs 2027 crore in Q4FY16 as compared to previous quarter.
Federal Bank has announced its Q4FY16 results on April 29. The bank’s total earned interest has increased by 6.5 per cent to Rs 2027 crore in Q4FY16 as compared to previous quarter. Its operating profit before provisions and contingencies also has risen by 17.93 per cent to Rs 168 crore in Q4FY16 as compared to previous quarter. Federal Bank’s provisions and contingencies expense has bubbled to Rs 389 crore in Q4FY16 against Rs 75 crore in Q3FY16. The bank’s bottom line has declined almost 93.69 per cent to Rs 10.26 crore in Q4FY16 on a quarterly basis.
On a yearly basis, Federal Bank’s consolidated top line has increased by 4.47 per cent to Rs 7823 crore in FY16 as compared to previous fiscal year. However, the bank’s operating profit before provisions and contingencies has decreased by 13.1 per cent to Rs 657 crore in FY16 as compared to previous fiscal year. Its provisions and contingencies expense has surged by almost seven times to Rs 705 crore in FY16 on a yearly basis. Federal Bank’s bottom line has reduced more than half to Rs 486 crore in FY16 as compared to previous fiscal year.
On asset quality front, Federal Bank’s gross non-performing assets (NPA) stand at 2.84 per cent amounting to Rs 1668 crore as of Q4FY16 against 3.15 per cent amounting to Rs 1684 crore in Q3FY16. The bank’s net NPA stands at 1.64 per cent amounting to Rs 950 crore in Q4FY16 while at 1.66 per cent to Rs 876 crore in Q3FY16.
On segmental revenue front, Federal Bank earned 26.51 per cent from Treasury segment, 27.42 per cent from Wholesale banking segment, 45.16 per cent from Retail Banking segment and remaining 0.92 per cent from others segment during FY16.
The share price of Federal Bank has declined by 4.79 per cent on bourses in early trades; and is trading at Rs 45.3 on an intraday basis.
The Federal Bank is engaged in providing retail, corporate and Para banking activities. The Bank operates through four segments viz. Treasury, Corporate or Wholesale Banking, Retail Banking and other banking operations. It has a network of 1277 branches in India.
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