The Federal Bank (FEDERALBNK) Q4 03/04 earnings summary

Executive summary

• FY04 business grew 23% to ₹21,177 crore, with operating profit of ₹437 crore and net profit of ₹136 crore; net NPAs fell to 2.89% of net advances from 4.95%.

• Growth came amid softening interest rates, sluggish credit demand and intense competition on lending prices; strong treasury gains and lower deposit costs supported profitability.

Financial highlights

• Gross income rose 10.7% to ₹1,490 crore; net profit increased 29.8% to ₹136.30 crore from ₹105.01 crore, and reported basic EPS rose to ₹62.65 from ₹48.36.

• Operating profit reached a record ₹436.74 crore, up from ₹351.49 crore; total business grew 23% to ₹21,177 crore.

• Deposits increased 23% to ₹13,477 crore and advances rose 23.91% to ₹7,701 crore; average deposit cost declined to 6.24% from 7.63%.

• Net owned funds reached ₹648 crore; total assets were ₹15,114 crore at 31 March 2004.

Outlook and guidance

• FY05 outlook anticipated comfortable resource mobilisation, reasonably good credit deployment and investment opportunities, supported by economic development.

• Greater use of IT-enabled delivery channels and products was expected to widen the customer base and improve low-cost deposits.

• The Board recommended a 70% dividend, up from 40%, and a 2-for-1 bonus issue, subject to shareholder, RBI and other required approvals.