The Federal Bank (FEDERALBNK) Q4 01/02 earnings summary

Executive summary

• FY02 marked a record operating-profit year, with higher net profit, improved per-share metrics, deposit growth and lower absolute net NPAs.

• Strategy emphasized sustainable growth, low-cost core deposits, retail lending, technology investment, fee income and stronger risk controls.

Financial highlights

• Total income rose to Rs.1,262.81 crore from Rs.1,044.27 crore; total expenses were Rs.957.41 crore.

• Operating profit reached a record Rs.305.40 crore; net profit was Rs.82.01 crore, up 34% YoY.

• Balance-sheet size grew 15% to Rs.10,144.61 crore; deposits rose 15.65% to Rs.8,865 crore and advances reached Rs.5,189.13 crore.

• Other income increased to Rs.220.42 crore, including Rs.130.50 crore net profit on investment sales; investment revaluation losses were Rs.4.25 crore.

• Basic EPS rose to Rs.37.76 from Rs.28.11; book value per share reached Rs.206.63 from Rs.191.32.

Outlook and guidance

• Five-year business plan for 2002–06 set sustainable growth as its core objective; priorities included a sound customer base, profitability and shareholder value.

• ATM network expansion targeted 150 machines by FY03 from 39 operating at year-end FY02; FedWide branch connectivity was also in progress.

• Fee-income initiatives included insurance and mutual-fund distribution, cash-management services, depository services and foreign-currency remittances.