REG - Federal Bank Ltd The - 1st Quarter Results <Origin Href="QuoteRef">FED.NS</Origin>

Federal BankAnnouncement

28/07/2016 07:05

RNS Number : 4103F
Federal Bank Ltd (The)
27 July 2016
 
Deloitte 
Haskins & Sells 
MPChitale&Co.
Chartered Accountants
Wilmont Park Business Centre
1st Floor, Warriam Road
Kochi - 682 016
INDIA
Chartered Accountants
First Floor, Hamam House
Ambalal Doshi Marg, Fort
Mumbai - 400 001
INDIA 
Tel : +91 484 2353694
Fax: +91 484 2380094
Tel : +91 22 22651186
Fax: +91 22 22655334
INDEPENDENT AUDITORS' REVIEW REPORT ON 
REVIEW OF INTERIM FINANCIAL RESULTS
 
TO THE BOARD OF DIRECTORS OF
THE FEDERAL BANK LIMITED
1. We have reviewed the accompanying Statement of Standalone Unaudited Financial Results of THE FEDERAL BANK LIMITED ("the Bank") for the quarter ended 30th June, 2016 ("the Statement"), being submitted by the Bank pursuant to the requirement of Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 except for the matters set out in para 5 below. This Statement which is the responsibility of the Bank's Management and approved by the Board of Directors, has been prepared in accordance with the accounting principles generally accepted in India along with the recognition and measurement principles laid down in Accounting Standard for Interim Financial Reporting (AS 25), prescribed under Section 133 of the Companies Act, 2013 read with relevant rules issued thereunder in so far as they apply to Banking Companies and circulars and guidelines issued by the Reserve Bank of India (RBI) from time to time. Our responsibility is to issue a report on the Statement based on our review.
2. We conducted our review of the Statement in accordance with the Standard on Review Engagements (SRE) 2410 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity', issued by the Institute of Chartered Accountants of India. This Standard requires that we plan and perform the review to obtain moderate assurance as to whether the Statement is free of material misstatement. A review is limited primarily to inquiries of Bank's personnel and analytical procedures applied to financial data and thus provides less assurance than an audit. We have not performed an audit and, accordingly, we do not express an audit opinion. 
3. In the conduct of our review, 106 branches have been reviewed by either of us which covers 56 percent of the advances portfolio of the bank as at 30th June, 2016. We have also relied upon various returns received from the branches of the bank.
4. Based on our review conducted as stated above, nothing has come to our attention that causes us to believe that the Statement, prepared in accordance with the aforesaid Accounting Standards and other accounting principles generally accepted in India in so far as they apply to Banking Companies and circulars and guidelines issued by the RBI from time to time, has not disclosed the information required to be disclosed in terms of Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, including the manner in which it is to be disclosed, or that the financial results for the quarter ended 30th June, 2016 contains any material misstatement or has not been prepared in accordance with relevant prudential norms issued by the RBI in respect of income recognition, asset classification, provisioning and other related matters.
5. The Pillar 3 disclosures and the leverage ratio under Basel III Capital Regulations as set out in note no.4 of the Statement have not been subjected to our review.
6. Attention is drawn to note no. 8 of the Statement regarding deferment of shortfall arising from the sale of certain non-performing assets during the year 2015-16 in terms of RBI Master Circular DBR.No.BP.BC.2/21.04.048/2015-16 - Prudential Norms on Income Recognition, Asset Classification and Provisioning pertaining to Advances, dated July 1, 2015, as amended and the unamortised balance as at 30th June, 2016 of Rs.6,504.86 Lakhs. 
Our conclusion is not modified in respect of this matter.
For DELOITTE HASKINS & SELLS
For M P CHITALE & CO.
Chartered Accountants
Chartered Accountants
(Firm's Registration No.008072S)
(Firm's Registration No. 101851W)

M. Ramachandran
Sanat Ulhas Chitale
Partner
Partner
(Membership No.16399)
(Membership No.143700)
KOCHI,
22 July, 2016


THE FEDERAL BANK LIMITED
REGD.OFFICE: P.B.NO. 103, FEDERAL TOWERS, ALUVA-683101
(CIN: L65191KL1931PLC000368)
STANDALONE UNAUDITED FINANCIAL RESULTS FOR THE QUARTER ENDED JUNE 30, 2016





(` in Lakhs) 
Particulars
Quarter ended 
Year ended
31.03.2016
30.06.2016
31.03.2016
30.06.2015
Unaudited
Audited
(Refer Note 10 below)
Unaudited
Audited
1. Interest earned (a)+(b)+(c)+(d)
 201,377 
 202,667 
 191,363 
 774,815 
(a)
Interest/discount on advances/bills
 152,422 
 146,949 
 141,423 
 566,931 
(b)
Income on Investments
 43,084 
 45,996 
 43,085 
 176,309 
(c)
Interest on balances with Reserve Bank of India and other inter bank funds
 1,216 
 725 
 1,309 
 5,596 
(d)
Others
 4,655 
 8,997 
 5,546 
 25,979 
2. Other Income
 23,704 
 22,671 
 19,346 
 78,292 
3. TOTAL INCOME (1+2)
 225,081 
 225,338 
 210,709 
 853,107 
4. Interest expended
 132,110 
 134,058 
 130,839 
 524,045 
5. Operating Expenses (i)+(ii)
 50,385 
 51,828 
 43,149 
 186,684 
(i)
Employees Cost
 28,941 
 29,304 
 25,229 
 105,285 
(ii)
Other operating expenses
 21,444 
 22,524 
 17,920 
 81,399 
6. TOTAL EXPENDITURE (4+5)
(excluding Provisions and Contingencies)
 182,495 
 185,886 
 173,988 
 710,729 
7. OPERATING PROFIT (3-6)
(Profit before Provisions and Contingencies)
 42,586 
 39,452 
 36,721 
 142,378 
8. Provisions (other than Tax) and Contingencies
 16,848 
 38,864 
 15,310 
 70,413 
9. Exceptional Items

 - 
 - 
 - 
 - 
10. Profit from Ordinary Activities before tax (7-8-9)
 25,738 
 588 
 21,411 
 71,965 
11. Tax expense

 9,007 
 (438)
 7,272 
 24,400 
12. Net Profit from Ordinary Activities after tax (10-11)
 16,731 
 1,026 
 14,139 
 47,565 
13. Extraordinary items (net of tax expense)

 - 
 - 
 - 
 - 
14. Net Profit for the period (12-13)

 16,731 
 1,026 
 14,139 
 47,565 
15. Paid-up Equity Share Capital (Refer Note 9)
(Face value ` 2/- per Equity Share) 
 34,387 
 34,379 
 17,159 
 34,379 
16. Reserves excluding Revaluation Reserve 



 774,242 
17. Analytical Ratios





(i)
Percentage of shares held by Government of India
NIL
NIL
NIL
NIL
(ii)
Capital Adequacy ratio (%)





Under Basel III
 13.59 
 13.93 
 15.07 
 13.93 
(iii)
Earnings per Share (EPS) (in `) (Refer Note 9)





(a) Basic EPS (before and after Extra ordinary Items)
0.97*
0.06*
0.83*
2.77

(b) Diluted EPS (before and after Extra ordinary Items)
0.97*
0.06*
0.82*
2.75
(iv)
NPA Ratios





a) Gross NPA
 174,731 
 166,777 
 130,458 
 166,777 

b) Net NPA
 99,450 
 95,001 
 48,447 
 95,001 

c) % of Gross NPA
 2.92 
 2.84 
 2.59 
 2.84 

d) % of Net NPA
 1.68 
 1.64 
 0.98 
 1.64 
(v)
Return on Assets (%)
0.19* 
0.01*
0.17* 
 0.57 






* Not Annualised





Segment Information@









(` in Lakhs) 
Particulars
Quarter ended
Year ended
31.03.2016
30.06.2016
31.03.2016
30.06.2015
Unaudited
Audited
(Refer Note 10 below)
Unaudited
Audited
Segment Revenue:





Treasury 
 59,567 
 59,193 
 57,729 
 228,193 

Corporate/Wholesale Banking
 71,890 
 67,702 
 53,062 
 236,094 

Retail Banking
 92,121 
 92,787 
 99,635 
 380,964 

Other Banking operations
 1,503 
 5,656 
 283 
 7,856 

Unallocated
 - 
 - 
 - 
 - 

Total Revenue
 225,081 
 225,338 
 210,709 
 853,107 

Less: Inter Segment Revenue
 - 
 - 
 - 
 - 
Income from Operations
 225,081 
 225,338 
 210,709 
 853,107 
Segment Results (net of provisions):





Treasury 
 12,825 
 3,172 
 1,799 
 15,852 

Corporate/Wholesale Banking
 3,337 
 (5,324)
 1,439 
 1,814 

Retail Banking
 9,020 
 (2,062)
 18,438 
 49,459 

Other Banking operations
 944 
 5,532 
 234 
 7,385 

Unallocated
 (388)
 (730)
 (499)
 (2,545)

Profit before tax
 25,738 
 588 
 21,411 
 71,965 
Capital employed:





Treasury 
 297,703 
 250,922 
 308,062 
 250,922 

Corporate/Wholesale Banking
 142,200 
 152,771 
 108,880 
 152,771 

Retail Banking
 194,123 
 201,481 
 172,157 
 201,481 

Other Banking operations
 1,803 
 2,656 
 4,449 
 2,656 

Unallocated
 190,186 
 201,292 
 195,436 
 201,292 

Total
 826,015 
 809,122 
 788,984 
 809,122 
@
For the above segment reporting, the reportable segments are identified into Treasury, Corporate/Wholesale Banking, Retail Banking and Other Banking Operations in compliance with the RBI guidelines. 
Notes:




1
The above Standalone Unaudited Financial Results for the quarter ended June 30, 2016 were reviewed by the Audit Committee and approved by the Board of Directors at its meeting held on July 22, 2016. These Results have been subjected to "Limited Review" by the Statutory Central Auditors of the Bank and an unmodified review report has been issued.
2
The Bank has made provision for Non Performing Assets as stipulated under Reserve Bank of India (RBI) norms. Further, provision for standard assets including requirements for exposures to entities with Unhedged Foreign Currency Exposures and provision for restructured advances have been made as per RBI guidelines.
3
The Bank has followed the same significant accounting policies in the preparation of the interim financial statements as those followed in the annual financial statements for the year ended March 31, 2016.
4
In accordance with RBI Circular DBR.No.BP.BC.1/21.06.201/2015-16 on Basel III Capital Regulations dated July 01, 2015 and RBI Circular DBR.No.BP.BC.80/21.06.201/2014-15 dated March 31, 2015 - 'Prudential Guidelines on Capital Adequacy and Liquidity Standards - amendments', Banks are required to make Pillar 3 disclosure requirements including Leverage Ratio disclosure requirements that are to be made along with the publication of Financial Results. Accordingly, such applicable disclosures have been placed on the website of the Bank which can be accessed at the following link: http://www.federalbank.co.in/regulatory-disclosures. These disclosures have not been subjected to review by the Statutory Central Auditors of the Bank. 
5
Other income includes fees earned from providing services to customers, commission from non-fund based banking activities, earnings from foreign exchange and derivative transactions, selling of third party products, profit on sale of investments (net), recoveries from advances written off.






6
Pursuant to RBI Circular DBR.BP.BC.No.31/21.04.018/2015-16 dated July 16, 2015, the Bank has, effective from September 30, 2015 included its deposits placed with NABARD, SIDBI and NHB on account of shorfall in lending to priority sector under 'Other Assets'. Hitherto these were included under 'Investments' and Interest income thereon was included under 'Interest Earned - Income on Investments'. Arising out of regrouping in line with the above mentioned RBI guidelines, interest income on deposits placed with NABARD, SIDBI and NHB is included under 'Interest Earned - Others'. Figures for the previous periods / year have been regrouped / reclassified to conform to current period classification. The above change in classification has no impact on the profit of the Bank for the quarters ended March 31, 2016, June 30, 2016 and year ended March 31, 2016.
7
During the quarter ended June 30, 2016, the Bank had allotted 4,28,690 Equity Shares, pursuant to the exercise of stock options by certain employees.






8
During the year ended March 31,2016, the Bank had assigned certain Non performing financial assets to Asset Reconstruction Companies. In terms of RBI Master Circular DBR.No.BP.BC.2/21.04.048/2015-16 - Prudential norms on Income Recognition, Asset Classification and Provisioning pertaining to Advances dated July 1, 2015, as amended, the shortfall arrived at by deducting sale consideration from the net book value of the financial assets, is amortised over a period of two years. Accordingly, the bank has charged to the profit and loss account an amount of ` 2,168.29 Lakhs for the Quarter and the unamortised balance carried forward as on June 30,2016 is ` 6,504.86 Lakhs, to be amortised over the next three quarters.
9
The shareholders of the Bank had approved the issue of Bonus Shares at the Annual General Meeting held on June 29, 2015, in the Ratio of 1:1 for Shares held as on the record date of July 9, 2015. Pursuant to the above 85,79,45,206 fully paid up Equity Shares had been allotted by the bank as bonus shares and One Global Depository Share (GDS) had been issued as bonus for every GDS held to the existing holders as on the record date. Consequently, as per the extant ESOS 2010 Scheme bonus options had been provided to the existing ESOS option holders and the exercise price had been adjusted accordingly. The earnings per share have been adjusted for the quarter ended June 30, 2015 in accordance with Accounting Standard 20, Earnings per share.
10
The figures of the quarter ended March 31, 2016 are the balancing figures between the audited figures in respect of the full Financial Year upto March 31, 2016 and the unaudited published year to date figures upto December 31, 2015 being the date of the end of the third quarter of the financial year, which were subjected to Limited Review.
11
Previous period's / year's figures have been regrouped / reclassified, where necessary to conform to current period's classification.



























SHYAM SRINIVASAN 
Kochi

MANAGING DIRECTOR & CEO 
July 22, 2016

(DIN: 02274773) 

This information is provided by RNS
The company news service from the London Stock Exchange
  END
QRFEAAXXAAAKEFF