Federal Bank

Often referred to an “Kerala NRI” bank, this private sector bank has done very well for Q1FY15. Despite just a 11% rise in NII at Rs.564 crore, the bank’s net profit surged to Rs.220 crore, up by a jaw dropping 108%. This major jump, from a mediocre NII growth to superlative jump in net profit was mainly on account of lower provisioning – it came down from Rs.55 crore in Q4 and Rs.235 crore in Q1FY14 to Rs.22 crore in current Q1. The YoY ‘base effect’ on account of the high provisioning also elevates the growth in net profit. Sequentially, net profit actually fell 20%.  On the other parameters, the performance was down – NIM slipped from 3.6% to 3.25% (QoQ). Other income was also lower at Rs.156 crore, down 27% (YoY).

On the asset quality front, there is good news.  Gross NPA was down 2.46% to 2.22% (QoQ) while Net NPA fell to 0.68% from 0.74%. In terms of segments, corporate banking continues to do the best, with its EBIT for the quarter coming in at 22.48% v/s 8.59% (QoQ). Treasury has also done much better, with its EBIT at 14.79%, up from a measly 3.56% in previous quarter. Retail banking was the low performer, with its EBIT down from 23.09% to 14.96%.