REG - Federal Bank Ltd The - 3rd Quarter Results <Origin Href="QuoteRef">FED.NS</Origin>

Federal BankAnnouncement

19/01/2018 09:20

RNS Number : 3750C
Federal Bank Ltd (The)
19 January 2018
 
 
SDF-24/  /2017-18 19th January 2018
   
To,
The London Stock Exchange
Dear Sir,
We enclose herewith the Un-Audited Financial Results of the Bank for the period ended December 31, 2017 which was approved at the Bank's Board of Directors meeting held on 15th January 2018.
Kindly take the same on your record.
For The Federal Bank Limited
Girish Kumar G
COMPANY SECRETARY


B S R & Co. LLP
M.M. Nissim & Co.
Chartered Accountants
Chartered Accountants
5th Floor, Lodha Excelus
Barodawala Mansion, B-Wing,
Apollo Mills Compound
3rd Floor, 81,
N.M. Joshi Marg, Mahalaxmi
Dr. Annie Besant Road,
Mumbai- 400 011
Worli, Mumbai- 400 018
 
Limited Review Report on Quarterly Standalone Financial Results of The Federal Bank Limited pursuant to the Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015
To the Board of Directors of 
The Federal Bank Limited
1. We have reviewed the accompanying Statement of Unaudited Standalone Financial Results ('theStatement') of The Federal Bank Limited ('the Bank') for the quarter and nine months ended 31 December 2017. This statement has been prepared by the Bank pursuant to Regulation 33 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, except for the disclosures relating to consolidated Pillar 3 disclosure as at 31 December 2017, including leverage ratio and liquidity coverage ratio under Basel III Capital Regulations as have been disclosed on the Bank's website and in respect of which a link has been provided in the standalone quarterly financial results and have not been reviewed by us. 
2. This Statement is the responsibility of the Bank's management and has been approved by the Board of Directors of the Bank in its meeting held on 15 January 2018. Our responsibility is to issue a report on the Statement based on our review. 
3. We conducted our review in accordance with the Standard on Review Engagement (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 the 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.
4. The Financial results incorporate the relevant returns of 108 Branches and Treasury Branch reviewed by either of us and un-reviewed returns in respect of 1,144 branches. The Branches reviewed by either of us covers 50.97 % of the advances portfolio (excluding outstanding of asset recovery branches and food credit advance) of the Bank and 50.48 % of non-performing advances of the Bank. 
Limited Review Report (continued)
5. Based on our review conducted as mentioned in paragraphs 3 and 4 above, nothing has come to our attention that causes us to believe that the accompanying Statement prepared in accordance with applicable accounting standards specified under Section 133 of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014 and other recognized accounting practices and policies has not disclosed the information required to be disclosed in terms of Regulation 33 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 including the manner in which it is to be disclosed, or that it contains any material misstatement or that it has not been prepared in accordance with the relevant prudential norms issued by the Reserve Bank of India in respect of income recognition, asset classification, provisioning and other related matters.
For B S R & Co. LLP
For M.M. Nissim & Co.
Chartered Accountants
Chartered Accountants
Firm's Registration No: 101248W / W-100022
Firm's Registration No: 107122W








Akeel Master
Sanjay Khemani
Partner
Partner
Membership No: 046768
Membership No: 044577
Mumbai
Kochi
15 January 2018 
15 January 2018 

THE FEDERAL BANK LIMITED
REGD.OFFICE: P.B.NO. 103, FEDERAL TOWERS, ALUVA-683101
(CIN: L65191KL1931PLC000368)
STANDALONE UNAUDITED FINANCIAL RESULTS FOR THE QUARTER AND NINE MONTHS ENDED DECEMBER 31, 2017







(` in Lakhs) 
Particulars
Quarter ended 
Nine Months Ended
Year ended 31.03.2017
31.12.2017
30.09.2017
31.12.2016
31.12.2017
31.12.2016
Unaudited
Unaudited
Unaudited
Unaudited
Unaudited
Audited
1. Interest earned (a)+(b)+(c)+(d)
 250,120 
 237,960 
 228,142 
720,489
 636,144 
 867,739 
(a)
Interest/discount on advances/bills
 194,097 
 185,900 
 171,622 
558,772
 480,924 
 654,568 
(b)
Income on investments
 48,220 
 45,000 
 45,122 
140,049
 131,758 
 180,140 
(c)
Interest on balances with Reserve Bank of India and other inter bank funds
 2,788 
 2,586 
 3,494 
7,741
 6,295 
 9,893 
(d)
Others
 5,015 
 4,474 
 7,904 
13,927
 17,167 
 23,138 
2. Other income
 22,863 
 28,722 
 27,541 
84,495
 79,755 
 108,181 
3. TOTAL INCOME (1+2)
 272,983 
 266,682 
 255,683 
804,984
 715,899 
 975,920 
4. Interest expended
 155,120 
 148,069 
 149,003 
455,530
 415,119 
 562,475 
5. Operating expenses (i)+(ii)
 61,723 
 60,292 
 59,190 
179,208
 163,211 
 220,954 
(i)
Employees cost
 30,047 
 31,274 
 31,972 
91,166
 90,072 
 116,375 
(ii)
Other operating expenses
 31,676 
 29,018 
 27,218 
88,042
 73,139 
 104,579 
6. TOTAL EXPENDITURE (4+5)
(excluding provisions and contingencies)
 216,843 
 208,361 
 208,193 
634,738
 578,330 
 783,429 
7. OPERATING PROFIT (3-6)
(Profit before provisions and contingencies)
 56,140 
 58,321 
 47,490 
170,246
 137,569 
 192,491 
8. Provisions (other than tax) and contingencies
 16,243 
 17,677 
 15,882 
57,564
 49,570 
 61,841 
9. Exceptional items

 - 
 - 
 - 
 - 
 - 
 - 
10. Profit from Ordinary Activities before tax
(7-8-9)
 39,897 
 40,644 
 31,608 
112,682
 87,999 
 130,650 
11. Tax expense

 13,896 
 14,274 
 11,043 
39,296
 30,579 
 47,571 
12. Net Profit from Ordinary Activities after tax (10-11)
 26,001 
 26,370 
 20,565 
73,386
 57,420 
 83,079 
13. Extraordinary items (net of tax expense)

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

 26,001 
 26,370 
 20,565 
73,386
 57,420 
 83,079 
15. Paid-up Equity Share Capital
(Face value ` 2/- per Equity Share) 
 39,327 
 39,091 
 34,443 
39,327
 34,443 
 34,481 
16. Reserves excluding Revaluation Reserve 





 859,256 
17. Analytical Ratios







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







Under Basel III
 14.41 
 14.63 
 12.28 
14.41
 12.28 
 12.39 
(iii)
Earnings per Share (EPS) (in `)







(a) Basic EPS (before and after extra ordinary items)
1.33*
1.35*
1.20*
3.90*
3.34*
4.83

(b) Diluted EPS (before and after extra ordinary items)
1.31*
1.33*
1.18*
3.85*
3.29*
4.76
(iv)
NPA Ratios







a) Gross NPA
 216,119 
 194,897 
 195,155 
216,119
 195,155 
 172,705 

b) Net NPA
 115,668 
 106,638 
 110,237 
115,668
 110,237 
 94,120 

c) % of Gross NPA
 2.52 
 2.39 
 2.77 
2.52
 2.77 
 2.33 

d) % of Net NPA
 1.36 
 1.32 
 1.58 
1.36
 1.58 
 1.28 
(v)
Return on Assets (%)
0.22 * 
0.24 *
0.20 * 
0.65 *
0.60* 
 0.84 








* Not Annualised






Segment Information@













(` in Lakhs) 
Particulars
Quarter ended
Nine Months Ended
Year ended 31.03.2017
31.12.2017
30.09.2017
31.12.2016
31.12.2017
31.12.2016
Unaudited
Unaudited
Unaudited
Unaudited
Unaudited
Audited
Segment Revenue:







Treasury 
 56,206 
 58,686 
 60,511 
 178,668 
 172,362 
 231,601 

Corporate/Wholesale Banking
 90,703 
 94,157 
 76,815 
 275,501 
 221,630 
 307,150 

Retail Banking
 121,639 
 109,591 
 112,211 
 338,208 
 308,948 
 417,952 

Other Banking operations
 4,435 
 4,248 
 6,146 
 12,607 
 12,959 
 19,217 

Unallocated
 - 
 - 
 - 
 - 
 - 
 - 

Total Revenue
 272,983 
 266,682 
 255,683 
 804,984 
 715,899 
 975,920 

Less: Inter Segment Revenue
 - 
 - 
 - 
 - 
 - 
 - 

Income from Operations
 272,983 
 266,682 
 255,683 
 804,984 
 715,899 
 975,920 
Segment Results (net of provisions):







Treasury 
 5,071 
 10,902 
 8,785 
 28,713 
 31,976 
 38,816 

Corporate/Wholesale Banking
 495 
 6,405 
 268 
 5,078 
 (1,303)
 8,250 

Retail Banking
 34,744 
 22,789 
 20,204 
 78,358 
 52,459 
 76,938 

Other Banking operations
 492 
 1,047 
 3,192 
 2,429 
 6,958 
 9,553 

Unallocated
 (905)
 (499)
 (841)
 (1,896)
 (2,091)
 (2,907)

Profit before tax
 39,897 
 40,644 
 31,608 
 112,682 
 87,999 
 130,650 
Segment Assets








Treasury 
 3,241,455 
 3,050,768 
 3,112,415 
 3,241,455 
 3,112,415 
 3,165,601 

Corporate/Wholesale Banking
 4,597,454 
 4,580,074 
 3,568,159 
 4,597,454 
 3,568,159 
 3,282,581 

Retail Banking
 4,309,837 
 3,879,775 
 3,824,803 
 4,309,837 
 3,824,803 
 4,436,505 

Other Banking operations
 757 
 1,806 
 4,398 
 757 
 4,398 
 1,854 

Unallocated
 672,567 
 663,369 
 639,963 
 672,567 
 639,963 
 611,152 

Total
 12,822,070 
 12,175,792 
 11,149,738 
 12,822,070 
 11,149,738 
 11,497,693 
Segment Liabilities








Treasury 
 3,022,847 
 2,860,293 
 2,969,844 
 3,022,847 
 2,969,844 
 3,050,206 

Corporate/Wholesale Banking
 4,410,665 
 4,379,950 
 3,506,679 
 4,410,665 
 3,506,679 
 3,184,798 

Retail Banking
 4,131,632 
 3,708,703 
 3,752,425 
 4,131,632 
 3,752,425 
 4,294,476 

Other Banking operations
 1 
 - 
 - 
 1 
 - 
 - 

Unallocated
 52,815 
 53,523 
 52,945 
 52,815 
 52,945 
 73,975 

Total
 11,617,960 
 11,002,469 
 10,281,893 
 11,617,960 
 10,281,893 
 10,603,455 
Capital employed:






(Segment Assets - Segment Liabilities)







Treasury 
 218,608 
 190,475 
 142,571 
 218,608 
 142,571 
 115,395 

Corporate/Wholesale Banking
 186,789 
 200,124 
 61,480 
 186,789 
 61,480 
 97,783 

Retail Banking
 178,205 
 171,072 
 72,378 
 178,205 
 72,378 
 142,029 

Other Banking operations
 756 
 1,806 
 4,398 
 756 
 4,398 
 1,854 

Unallocated
 619,752 
 609,846 
 587,018 
 619,752 
 587,018 
 537,177 

Total
 1,204,110 
 1,173,323 
 867,845 
 1,204,110 
 867,845 
 894,238 
@
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 ("Results") for the quarter and nine months ended December 31, 2017 were reviewed by the Audit Committee and approved by the Board of Directors at its meeting held onJanuary 15, 2018. These Results have been subjected to "Limited Review" by the Statutory Central Auditors of the Bank and an unqualified 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 Results as those followed in the annual financial statements for the year ended March 31, 2017.
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
The Business operations of the Bank are largely concentrated in India and for purpose of Segmental reporting, the bank considered to operate only in domestic segment, though the bank has its operations in International Finance Service Centre (IFSC) Banking Unit in Gujarat International Finance Tec-city (GIFT). The business conducted from the same is considered as a part of Indian operations.








6
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.
7
During the quarter ended June 30, 2017 , the Bank had issued 21,55,17,241 equity shares of ` 2 each for cash pursuant to a Qualified Institution Placement (QIP) as per the relevant provisions of SEBI (Listing Obligations and Disclosure Requirements) Regulations at ` 116.00 per share aggregating to ` 250,000 Lakhs (including share premium). This resulted in an increase of ` 4,310.35 Lakhs in Share Capital and ` 242,077.64 Lakhs (net of issue expenses) in Share premium account.
8
During the quarter and nine months ended December 31, 2017, the Bank allotted 1,17,85,610 and 2,67,93,570 equity shares of ` 2 each respectively, pursuant to the exercise of stock options by employees.
##
The Board of Directors have recommended a dividend of 45% i.e. ` 0.90/- per Equity Share on face value of ` 2/- each for the year 2016-17 (previous year 35% i.e ` 0.70/- per Equity Share) subject to the approval of the members at the ensuing Annual General Meeting. In terms of revised Accounting Standard (AS) 4 "Contingencies and Events occuring after the Balance sheet date" as notified by the Ministry of Corporate affairs through amendments to Companies (Accounting Standards) Amendment Rules, 2016, the Bank has not appropriated proposed dividend (including tax) aggregating to ` 18,675Lakhs from the statement of Profit and loss account for the year ended March 31, 2017. However the effect of the proposed dividend has been reckoned in determining capital funds in the computation of Capital adequacy ratio as on March 31, 2017.
9
Pursuant to Board approved policy on preparation of segment information, the Bank, with effect from quarter ended September 30, 2017, has revised the basis of preparation of segment information related to the allocation of RIDF deposits from Treasury segment to Corporate/Wholesale Banking and Retail Banking segments and allocation of provision related to advances on a direct identification basis for more appropriate presentation of the segment results. Figures for the previous periods have been regrouped / reclassified to conform to current period's classification. The impact of above regrouping / reclassification on segment results for the quarter and nine months ended December 31, 2017, is summarized in the table below:







(` in Lakhs) 

(Decrease) / Increase
Quarter ended
Nine months ended
Year ended 31.03.2017

31.12.2017
30.09.2017
31.12.2016
31.12.2017
31.12.2016

Treasury 
 (179)
 (205)
 6 
 (474)
 (582)
 (698)

Corporate/Wholesale Banking
 (420)
 (1,206)
 (1,981)
 (6,444)
 (8,900)
 (11,391)

Retail Banking
 (517)
 481 
 1,169 
 4,135 
 6,871 
 8,139 

Other Banking operations
 1,116 
 930 
 806 
 2,783 
 2,611 
 3,950 

Unallocated
 - 
 - 
 - 
 - 
 - 
 - 









The above regrouping / reclassification has no impact on the overall profit of the bank for the quarter and nine months ended December 31, 2017 or the previous periods/year.








10
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 
January 15, 2018



(DIN: 02274773) 

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