Federal Bank Q1 results: Standalone PAT up better-than-expected 42%; NII falls short of analysts' estimates

Federal Bank on Thursday reported a standalone net profit of Rs 854 crore for the quarter ended June 2023, marking a jump of 42 per cent compared with the corresponding period a year ago. The private sector lender's net profit exceeded analysts' estimates. Its net interest income (NII) — or the difference between interest earned and interest paid, however, fell short of Street expectations. 

Federal Bank shares — traded with the symbol FEDERALBNK on the bourses — remained under pressure after the earnings announcement, finishing the day with a loss of Rs 7.4 or 5.5 per cent at Rs 126.8 apiece on BSE. 

The bank's NII came in at Rs 1,918.6 crore for the April-June period as against Rs 1,605 crore for the year-ago period, according to a regulatory filing. 

According to Zee Business research, Federal Bank's quarterly net profit was estimated at Rs 800 crore and NII at Rs 1,950 crore.  

Federal Bank reported an increase of 40.8 per cent in revenue from its treasury operations to Rs 772.4 crore. Revenue from corporate and wholesale banking rose 52.4 per cent to Rs 1,642.5 crore, and that from retail banking went up 36.1 per cent to Rs 3,311.2 crore. 

Asset quality 

The bank's gross non-performing assets (NPAs) as a percentage of total loans stood at 2.38 per cent for the three-month period, as against 2.36 per cent for the previous quarter. 

Its net NPAs as a percentage of total loans remained steady on a sequential basis, at 0.69 per cent.

Zee Business analysts had pegged the lender's gross NPAs at 2.3 per cent at net NPAs at 0.69 per cent.

Federal Bank shares: Past performance

Federal Bank shares lost 4.7 per cent of their value in the June quarter, sharply underperforming gains of more than 10 per cent each in the Nifty and Nifty Bank indices.

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