Federal Bank share price jumped over 5 percent in the morning session on October 19. The bank for the September quarter reported a 26.2 percent year-on-year decline in September quarter profit, impacted by significant step up in provisions to further strengthen the balance sheet, but there was an improvement in asset quality.
Profit for the quarter declined to Rs 307.62 crore, compared to Rs 416.7 crore in the year-ago period. The strong growth in NII, other income and operating profit limited the decline in profit.
Net interest income surged 22.8 percent year-on-year to Rs 1,379.85 crore with muted loan growth of 6 percent YoY and net interest margin at 3.13 percent for the quarter, while deposit growth was 12 percent in Q2.
Provisions and contingencies increased by 135.2 percent year-on-year to Rs 592.06 crore in the quarter ended September 2020, and the sequential increase was 50 percent.
The stock was trading at Rs 55.10, up Rs 2.85, or 5.45 percent at 09:43 hours. It has touched an intraday high of Rs 55.15 and an intraday low of Rs 53.15. It also witnessed spurt in volume by more than 1.20 times and was trading with volumes of 2,765,292 shares, compared to its five day average of 2,851,907 shares, a decrease of -3.04 percent.
Asset quality has seen improvement with gross non-performing assets (NPA) falling 12bps sequentially to 2.84 percent in Q2FY21, while net NPA declined 23 bps QoQ to 0.99 percent at the end of September quarter.
Non-interest income increased 21 percent year-on-year to Rs 509.33 crore and pre-provision operating profit climbed 40 percent to Rs 1,006.53 crore in Q2FY21.
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