Federal Bank Q3 Results: Net Profit Declines 5% to Rs 955 Crore Despite Record PPoP

Federal Bank reported a 5% decline in net profit to Rs 955 crore for the third quarter ending December 30, 2024, compared to Rs 1,007 crore in the same period last year. This decline was primarily due to accelerated provisions for future risks, even as the bank achieved its highest-ever pre-provision operating profit (PPoP) of Rs 1,570 crore.

Key Financial Highlights

• Net Profit: Declined by 5% to Rs 955 crore.
• Pre-Provision Operating Profit (PPoP): Increased to a record Rs 1,570 crore, up from Rs 1,437 crore in the year-ago period.
• Net Interest Income (NII): Grew by 14.5% to Rs 2,431 crore.
• Fee Income: Rose by 21% year-on-year.
• Total Provisions: Stood at Rs 292 crore, including accelerated provisions for riskier asset classes.
• Provision Coverage Ratio: Improved to 74.21% from 71.08%.

Asset Quality Improvement

Federal Bank's asset quality showed significant improvement during the quarter:

• Gross Non-Performing Assets (GNPA): Declined to 1.95% from 2.29% a year ago.
• Net Non-Performing Assets (NNPA): Reduced to 0.49% from 0.64%.

Advances and Deposits Growth

The bank reported strong growth in its loan book and deposit base:

• Total Net Advances: Increased by 16% year-on-year to Rs 2.30 lakh crore.
• Total Deposits: Grew by 11% to Rs 2.66 lakh crore.

Management Commentary

KVS Manian, Managing Director of Federal Bank, stated, "In alignment with our commitment to building a robust foundation, we have undertaken accelerated provisioning for certain riskier asset classes this quarter." This proactive approach reflects the bank's focus on strengthening its balance sheet and mitigating future risks.

Outlook

Despite the decline in net profit, Federal Bank's strong operating performance and improved asset quality highlight its resilience in a challenging economic environment. The bank's focus on risk management and growth in core income streams positions it well for future stability and expansion.

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Categories: asset quality improvement, Federal Bank Q3 results, net profit decline, PPoP record