The Federal Bank (FEDERALBNK) Q4 02/03 earnings summary

Executive summary

• FY03 operating profit reached a record Rs 351.49 crore and net profit a record Rs 105.01 crore, despite falling interest rates, narrower spreads and sluggish credit demand.

• Total business rose 22% to Rs 17,165 crore; deposits grew 23.5% to Rs 10,947 crore and advances rose 19.8% to Rs 6,217 crore.

• Net NPAs fell to 4.95% of net advances from 8.60%; the proposed dividend increased to 40% from 35%, subject to RBI approval.

Financial highlights

• Gross income increased 6.58% to Rs 1,345.89 crore; operating profit rose to Rs 351.49 crore from Rs 305.40 crore.

• Net profit was Rs 105.01 crore, up 28.1% from Rs 82.00 crore; EPS increased to Rs 48.36 from Rs 37.76.

• Deposits reached Rs 10,947 crore, up 23.5%; advances rose 19.8% to Rs 6,217 crore.

• Investment income totaled Rs 565 crore versus Rs 522 crore; average investment return was 13.6%, down from 14.9%.

• Average cost of deposits fell to 7.63% from 8.70%; yield on advances was 12.48%.

Outlook and guidance

• FY04 outlook called for reasonably good credit growth and improved profitability, supported by greater use of technology and a broader range of banking services.

• The 90-day loan delinquency norm was due to take effect in FY04, increasing the importance of NPA management.