Its provisions stood at ₹167 crore in Q1 of FY23, down 74% from the same period last year. Federal Bank’s net interest income – the difference between interest earned and expended -- rose 13.1% year-on-year (y-o-y) to ₹1,605 crore. The bank’s net interest margin, a key profitability metric, stood at 3.22% in the June quarter, 7 basis points (bps) more than the same period of FY22.
“We have had an extremely encouraging start to the financial year despite all the challenges in the environment and the ongoing impact of covid-19, the war, which have thankfully escaped us. This quarter saw us record the highest net profit ever," said Shyam Srinivasan, managing director and chief executive, Federal Bank.
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Federal Bank reported an improvement in overall asset quality, with gross non-performing assets (NPAs) as a percentage of total loans contracting 81 bps y-o-y and 11 bps sequentially to 2.69%. However, the bank saw its retail slippages rise to ₹204 crore in Q1, up from ₹86 crore in the previous quarter and ₹126 crore in the same quarter of the previous financial year.
“In terms of the credit quality of the bank, it has been our hallmark and continues to be robust. We entered FY23 very strongly, with all metrics working along guided lines," said Srinivasan.
