Federal Bank Posts Its Highest-Ever Net Profit of Rs 704 Crore; Stock Rises

Federal Bank reported a 53 percent year-on-year (YoY) increase in net profit for the quarter ended September 2022 on October 14. The previous year's net profit was Rs 460 crore. Net interest income (NII) increased 19% year on year to Rs 1,761.83 crore.

Highlights

  • On the National Stock Exchange, the stock closed 4.6 percent higher today at Rs 130.75. (NSE).
  • Asset quality at the bank improved sequentially, with gross NPA (non-performing assets) at 2.46 percent, down from 2.69 percent in the previous quarter.

Federal bank

Federal Bank reported a 53 percent year-on-year (YoY) increase in net profit for the quarter ended September 2022 on October 14. The previous year's net profit was Rs 460 crore. Net interest income (NII) increased 19% year on year to Rs 1,761.83 crore.

On the National Stock Exchange, the stock closed 4.6 percent higher today at Rs 130.75. (NSE). The share price has increased by nearly 50% this year.

Asset quality at the bank improved sequentially, with gross NPA (non-performing assets) at 2.46 percent, down from 2.69 percent in the previous quarter. Net NPA and Net NPA as a percentage of Net Advances were Rs 1,262.35 crore and 0.78 percent, respectively, according to the company.

“This has been our strongest quarter till date with very good growth across all key parameters. Strong business momentum has aided meaningful gains in market share. Credit costs are well controlled at 53 bps. We are encouraged by this and are working to ensure that the trend continues,” Shyam Srinivasan, managing director & CEO said.

Analysing the results, Gaurav Jani – Research Analyst, Prabhudas Lilladher said, “NII was a beat. Loan growth was as expected. However, provisions rose sharply QoQ due to an increase in provision coverage ratio.”

The brokerage firm has a Buy rating on the stock with a target price of Rs 135.

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