Q1 Results: Federal Bank Confident Of Achieving Return On Assets Target By FY21-End

Federal Bank Ltd.’s Chief Executive Officer and Managing Director Shyam Srinivasan is confident of achieving the lender’s return on assets target, which is a measure of profitability.

Federal Bank’s RoA will reach 1.25 percent by the end of fiscal year 2020-21, Srinivasan told BloombergQuint. “The confidence that the last two and a half years delivered something, the next two and a half may mimic that similar growth is what we are forecasting.”

The private lender reported its highest RoA in 20 quarters in the quarter ended March 31 before it marginally slipped to 0.98 percent in Q1 FY20.

Speaking about stressed accounts, Srinivasan said that “thankfully” the bank is not involved in some of the most talked about ones such as airlines. The bank has also made “prudent’’ provisions to build a buffer, he said, adding the overall stressed book ranks the lowest among its peers.

Federal Bank Q1 Results (Year-on-Year, Standalone)

• Net interest income was up 18 percent at Rs 1,154 crore versus Rs 980 crore.
• Profit after tax rose 46 percent to Rs 384 crore versus Rs 262 crore.
• Gross NPAs stood at Rs 3,395 crore. The figure was up 18 percent YoY and 4 percent quarter-on-quarter.
• Gross NPAs were at 2.99 percent versus 3 percent QoQ.
• Net NPAs stood at 1.49 percent vs 1.72 percent QoQ.
• Provisions rose 8 percent to Rs 192 crore versus Rs 177 crore QoQ.

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