MUMBAI: Kochi-headquartered Federal Bank has reported a net profit of Rs 478 crore for the quarter ended March 2021, an increase of 58% over Rs 301 crore in the corresponding quarter last year. The bank reported a net profit of Rs 1,590 crore for the full year – an increase of 3% from Rs 1,542 crore in the corresponding period in the previous year.
The bank’s gross advances reached Rs 1,34,876 crore as of 31st March 2021 from Rs 1,24,153 crore as of March 2020 registering a growth of 8.6%. Retail advances grew by 18.6% to reach Rs 44,910 crore as of 31st March 2021 from Rs 37,877 crore as of March 2020. Growth in retail was driven by gold loans which registered a growth of 70% growth to reach Rs 15,816 crore as of 31st March 2021.
One of the reasons for the increase in net profit was the lower provisions that the bank made in the fourth quarter. “We have been providing significantly in the first three quarters without having NPAs so as when the NPAs were recognized in the fourth quarter we used the standard asset provisioning that we made earlier,” said Shyam Srinivasan, MD & CEO, Federal Bank. He added that in the current fiscal customers have not started approaching banks asking for relief yet as they are still getting their lives in order amid the second wave. “It does not mean that they won’t approach us in future. But so far we have received restructuring requests for barely Rs 100 crore” said Srinivasan.
He added that in FY21 the slippages at Rs 1874 crore was in line with the slippages in FY20. However, while last year the bank had made provisions of Rs 1,000 crore, the bank has increased the provisioning to Rs 1,500 crore thereby increasing the provision coverage ratio.
Srinivasan said that while it was difficult to make a forecast on credit growth, he expected a repeat of last year’s trend when growth was hit in the first half but came `roaring back’ in the second half.