Federal Bank Q1 Results: Stock jumps 7% after strong core income growth, stable asset quality

Federal Bank Ltd., the Kochi-based private sector lender, reported its results for the quarterly period that concluded on June 30 on Friday, July 17. The results were better on a year-on-year basis on the profitability and the interest income front.

The lender reported its Net Interest Income (NII) of ₹2,946 crore during the June quarter, which is 26% higher than the ₹2,336 crore it reported during the same quarter last year.

Federal Bank's net profit for the April to June quarter increased by 36.5% from the same quarter last year to ₹1,177 crore. The figure was higher than the previous cycle's figure of ₹862 crore.

Asset quality declined from the previous quarter. Gross NPA stood at 1.52% from 1.62% sequentially. Meanwhile, net Non-Performing Asset (NPA) slipped to 0.18% from 0.20% during the previous quarter. The net NPA figures stood at ₹506 crore, compared to ₹569 crore in the April quarter.

Provisions for the quarter stood at ₹ 317.7 crore from ₹741 crore in the previous quarter and ₹400 crore in the previous year.

Earlier this month, S&P Global Ratings assigned

fresh issuer credit ratings to the private sector lender, with a stable outlook, citing expectations of steady financial performance over the next two years. The global rating agency assigned Federal Bank a 'BBB-' long-term and 'A-3' short-term issuer credit rating.

Federal Bank NIM for the first quarter of the new FY was 3.33%, compared to 2.84% (YoY).

Shares of Federal Bank rose over 2.50% ahead of the results. After the announcement, the bank's stock price slipped over 1.5%. However, the stock recovered and rose nearly 8% from the lows of the day, and is now over 7% up.



In the past month of trade, the company's shares have risen in value by over 8%. The stock is currently trading at ₹349.50 per piece.