Federal Bank Q4 Results: One-offs contribute to profit growth despite provisions doubling; Asset quality better

Federal Bank Ltd., the Kochi-based private sector lender, reported its quarter results for the January-March period on Wednesday, April 29, which were better on a year-on-year basis, and also higher than what the street was anticipating.

Net profit for the period increased by 22.2% from the same quarter last year to ₹1,259 crore. The figure was marginally higher than the CNBC-TV18 poll of ₹1,176 crore. Profitability increased despite a surge of over 100% in provisions from the previous quarter.

Provisions for the quarter stood at ₹741 crore from ₹332 crore in the previous quarter.

Net Interest Income, or core income for the quarter increased by 33.5% to ₹3,173 crore, higher than the CNBC-TV18 poll of ₹2,854 crore.

Asset quality improved from the previous quarter. Gross NPA stood at 1.62% from 1.72% sequentially, while net NPA improved to 0.2% from 0.42% during the previous quarter.

Fresh slippages for the quarter stood at ₹474 crore, compared to ₹435 crore during the December quarter.

Profitability was also aided by an income tax refund of ₹455.6 crore. There was also a ₹114.5 crore write-back of provisions no longer required.

Federal Bank also made floating provisions worth ₹455.96 crore during the quarter.

Shares of Federal Bank fell as much as 2.5% after the results announcement. The stock is looking to recover from the lows of the day, currently trading 0.8% lower at ₹288.4.