Federal Bank posted a net profit of ₹903 crore for the fourth quarter of FY23, up 67% from the previous year thanks to strong loan growth across all business segments. For FY23, the profit after tax was ₹3011 crore.
Gross advances to the lender were at ₹1.8 lakh crore as of March 31, up 20 percent from the previous year, led by growth of 22 percent in agricultural advances, 24 percent in corporate loans, 18 percent in commercial bank loans and 17 percent. percent growth in retail loans.
On the earnings call, MD and CEO Shyam Srinivasan said that both the retail and wholesale segments are seeing healthy demand. FY23 was one of the best years for the bank in terms of corporate loan growth and the quality of the underlying portfolio, he said.
Srinivasan pegged FY24 loan growth at 18-20 percent, in which he sees retail, wholesale and gold loans growing at around 20 percent, similar to what was seen in FY23. However, growth could be faster in some retail segments, such as credit cards, personal loans, microfinance, and commercial vehicles, where the bank is a relatively new entrant and has a smaller portfolio.
Corporate demand is being led by higher demand for working capital fueled by a pick-up in the capital spending cycle and capacity utilization levels of around 75 percent, the bank said, adding that the corporate finance portfolio it’s still solid.
Net interest income for FY23 increased by 21 per cent to ₹7,232 crore. The net interest margin stood at 3.3 percent.
Srinivasan said most of the impact of the price revision was made in the fourth quarter and there may be only a residual revision in the current quarter as deposit rates are likely to have peaked assuming a pause in pricing. interest rates. He expects NIMs to stay in the 3.33-3.35 percent range for FY24.
The bank’s deposits rose 17 percent year-on-year to ₹2.1 lakh crore at the end of March. The gross NPA rate was 2.4% and the net NPA was 0.7% as of March 31.