REG - Federal Bank Ltd The - 3rd Quarter Results

Federal BankAnnouncement

21/01/2019 07:00

RNS Number : 5662N
Federal Bank Ltd (The)
21 January 2019
 


 
SDF-24/         /2018-19                                                                      19th January 2019
 
To,
The London Stock Exchange
 
 
Dear Sir,
We enclose herewith the Un-Audited Financial Results of the Bank for the period ended December 31, 2018 which was approved at the Bank's Board of Directors meeting held on 17th January 2019.
 
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




India


Tel.: +91 22 2496 9900




Telephone +91 (22) 4345 5300
Fax            +91 (22) 4345 5399


Email: mail@mmnissim.com



 
Limited review report on unaudited quarterly standalone financial results and standalone year to date 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 of

The Federal Bank Limited ('the Bank') for the quarter ended 31 December 2018 and year to date results for the period from 1 April 2018 to 31 December 2018 ('the Statement'), attached herewith, being submitted by the Bank pursuant to the requirement of Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 ('Listing Regulations'), except for the disclosures relating to consolidated Pillar 3 disclosure as at 31 December 2018, 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 Statement 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 their meeting held on 17 January 2019. 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" specified under section 143(10) of the Companies Act, 2013.  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 105 Branches and Treasury Branch reviewed by either of us and un-reviewed returns in respect of 1,146 branches. These Branches cover 58.07% of the advances portfolio (excluding outstanding of asset recovery branches and food credit advance) of the Bank and 60.83% of non-performing advances of the bank.
 
 
 
 
 
 
 
Limited review report on unaudited quarterly standalone financial results and standalone year to date results of The Federal Bank Limited pursuant to the Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (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 Listing Regulations 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


Mumbai




17 January 2019                                                                             


17 January 2019



 




 







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, 2018
































 (` in Lakhs)




Particulars


Quarter ended


Nine Months ended


Year ended 31.03.2018




31.12.2018


30.09.2018


31.12.2017


31.12.2018


31.12.2017




Unaudited


Unaudited


Unaudited


Unaudited


Unaudited


Audited




1. Interest earned (a)+(b)+(c)+(d)


       295,441


       276,492


       250,120


838,671


           720,489


          975,286




(a)


Interest/discount on advances/bills


       238,662


       221,051


       194,097


667,657


           558,772


          753,878




(b)


Income on investments


         50,558


         48,834


         48,220


150,107


           140,049


          191,744




(c)


Interest on balances with Reserve Bank of India and other inter bank funds


           1,557


           2,089


           2,788


6,169


               7,741


              9,581




(d)


Others


           4,664


           4,518


           5,015


14,738


             13,927


            20,083




2. Other income


         34,555


         32,289


         22,863


93,930


             84,495


          115,912




3. TOTAL INCOME (1+2)


     329,996


     308,781


     272,983


932,601


         804,984


    1,091,198




4. Interest expended


       187,712


       174,245


       155,120


530,689


           455,530


          617,005




5. Operating expenses (i)+(ii)


         71,501


         64,776


         61,723


201,077


           179,208


          245,090




(i)


Employees cost


         35,366


         30,893


         30,047


100,761


             91,166


          124,247




(ii)


Other operating expenses


         36,135


         33,883


         31,676


100,316


             88,042


          120,843




6. TOTAL EXPENDITURE (4+5)
(excluding provisions and contingencies)


     259,213


     239,021


     216,843


731,766


         634,738


        862,095




7. OPERATING PROFIT (3-6)
 (Profit before provisions and contingencies)


       70,783


       69,760


       56,140


200,835


         170,246


        229,103




8. Provisions (other than tax) and contingencies


         19,012


         28,882


         16,243


67,809


             57,564


            94,717




9. Exceptional items






                -  


                -  


                -  


                -  


                     -  


                   -  




10. Profit from Ordinary Activities before tax

(7-8-9)


       51,771


       40,878


       39,897


133,026


         112,682


        134,386




11. Tax expense






         18,408


         14,274


         13,896


46,788


             39,296


            46,501




12. Net Profit from Ordinary Activities after tax  (10-11)


       33,363


       26,604


       26,001


86,238


           73,386


          87,885




13. Extraordinary items (net of tax expense)






                -  


                -  


                -  


                -  


                     -  


                   -  




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






       33,363


       26,604


       26,001


86,238


           73,386


          87,885




15. Paid-up Equity Share Capital

(Face value ` 2/- per Equity Share)


         39,678


         39,612


         39,327


39,678


             39,327


            39,443




16. Reserves excluding Revaluation Reserve






















       1,181,080




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


           12.97


           13.29


           14.41


12.97


               14.41


              14.70




(iii)


Earnings per Share (EPS) (in `)
































(a) Basic EPS  (before and after extra ordinary items)


1.68*


1.34*


1.33*


4.36*


3.90*


4.62








(b) Diluted EPS (before and after extra ordinary items)


1.67*


1.33*


1.31*


4.33*


3.85*


4.56




(iv)


NPA Ratios
































a) Gross NPA


       336,123


       318,453


       216,119


336,123


           216,119


          279,562








b) Net NPA


       181,729


       179,629


       115,668


181,729


           115,668


          155,196








c) % of Gross NPA


             3.14


             3.11


             2.52


3.14


                 2.52


                3.00








d) % of Net NPA


             1.72


             1.78


             1.36


1.72


                 1.36


                1.69




(v)


Return on Assets (%)


0.23*


0.19*


 0.22 *


0.62*


 0.65 *


                0.75






































* Not Annualised
 
 
 




























Segment Information@


























 
































 (` in Lakhs)


 




Particulars


Quarter ended


Nine Months ended


Year ended 31.03.2018


 




31.12.2018


30.09.2018


31.12.2017


31.12.2018


31.12.2017


 




Unaudited


Unaudited


Unaudited


Unaudited


Unaudited


Audited


 




Segment Revenue:


























 








Treasury


             64,236


            61,715


              56,206


              188,247


           178,668


           239,556


 








Corporate/Wholesale Banking


           130,916


          118,582


              90,703


              362,297


           275,501


           378,695


 








Retail Banking


           128,913


          123,312


            121,639


              366,489


           338,208


           454,386


 








Other Banking operations


               5,931


              5,172


                4,435


                15,568


             12,607


             18,561


 








Unallocated


                     -  


                    -  


                     -  


                       -  


                     -  


                    -  


 








Total Revenue


         329,996


        308,781


          272,983


            932,601


         804,984


     1,091,198


 








Less: Inter Segment Revenue


                     -  


                    -  


                     -  


                       -  


                     -  


                    -  


 








Income from Operations


         329,996


        308,781


          272,983


            932,601


         804,984


     1,091,198


 




Segment Results (net of provisions):


























 








Treasury


             16,870


              3,468


                5,071


                30,134


             28,713


             25,650


 








Corporate/Wholesale Banking


               4,728


              4,999


                   495


                11,641


               5,078


           (13,797)


 








Retail Banking


             30,613


            33,062


              34,744


                91,998


             78,358


           120,093


 








Other Banking operations


                  444


                 216


                   492


                  1,410


               2,429


               5,251


 








Unallocated


                 (884)


               (867)


                 (905)


                (2,157)


             (1,896)


             (2,811)


 








Profit before tax


            51,771


          40,878


            39,897


            133,026


         112,682


         134,386


 




Segment Assets






























 








Treasury


        3,072,544


       3,118,628


         3,241,455


           3,072,544


        3,241,455


        3,510,841


 








Corporate/Wholesale Banking


        5,643,373


       5,856,115


         4,597,454


           5,643,373


        4,597,454


        5,072,766


 








Retail Banking


        5,395,943


       4,680,773


         4,309,837


           5,395,943


        4,309,837


        4,539,627


 








Other Banking operations


               2,057


              1,965


                   757


                  2,057


                  757


                  533


 








Unallocated


           864,000


          783,415


            672,567


              864,000


           672,567


           707,628


 








Total


    14,977,917


  14,440,896


    12,822,070


      14,977,917


   12,822,070


   13,831,395


 




Segment Liabilities






























 








Treasury


        2,923,393


       3,005,316


         3,022,847


           2,923,393


        3,022,847


        3,348,514


 








Corporate/Wholesale Banking


        5,471,439


       5,626,533


         4,410,665


           5,471,439


        4,410,665


        4,849,217


 








Retail Banking


        5,234,444


       4,499,891


         4,131,632


           5,234,444


        4,131,632


        4,341,585


 








Other Banking operations


                      2


                    -  


                       1


                         2


                      1


                      1


 








Unallocated


             59,914


            55,023


              52,815


                59,914


             52,815


             71,055


 








Total


    13,689,192


  13,186,763


    11,617,960


      13,689,192


   11,617,960


   12,610,372


 




Capital employed:


























 




(Segment Assets - Segment Liabilities)


























 








Treasury


           149,151


          113,312


            218,608


              149,151


           218,608


           162,327


 








Corporate/Wholesale Banking


           171,934


          229,582


            186,789


              171,934


           186,789


           223,549


 








Retail Banking


           161,499


          180,882


            178,205


              161,499


           178,205


           198,042


 








Other Banking operations


               2,055


              1,965


                   756


                  2,055


                  756


                  532


 








Unallocated


           804,086


          728,392


            619,752


              804,086


           619,752


           636,573


 








Total


      1,288,725


     1,254,133


      1,204,110


        1,288,725


      1,204,110


     1,221,023


 




@


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 and nine months ended December 31, 2018 were reviewed by the Audit Committee and approved by the Board of Directors at its meeting held on January 17, 2019. 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 interim financial results as those followed in the annual financial statements for the year ended March 31, 2018.


 




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 audit or review by the Statutory Central Auditors of the Bank.


 




5


The Business operations of the Bank are largely concentrated in India and for the purpose of Segment reporting, the bank is 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 etc.


 




7


During the quarter and nine months ended December 31, 2018, the Bank has allotted 3,302,388 and 11,760,856 equity shares of ` 2 each, pursuant to the exercise of stock options by employees.


 




8


In terms of RBI Circular No.DBR.No.BP.BC.113/21.04.048/2017-18 dated June 15, 2018, the Bank had exercised the option of spreading the provision for depreciation on marking to market bank's investment in Government Securities held under AFS and HFT category.  Accordingly, such provision for depreciation aggregating to ` 5,893.97 Lakhs as at June 30, 2018 was being amortised equally over four quarters. However, as on December 31, 2018, provision for depreciation towards marking such securities to market works out to ` 72.38 Lakhs only and accordingly, the Bank has carried forward unamortised depreciation of ` 36.19 Lakhs for amortisation in the quarter ending March 31, 2019.


 




9


Ministry of Labour and Employment, Government of India on March 29, 2018 has enhanced the gratuity ceiling to an employee under Payment of Gratuity Act, 1972 to ` 20 Lakhs from earlier limit of ` 10 lakhs. This change has resulted  to an incremental gratuity liability amounting to ` 7,143.90 lakhs. As per the RBI circular DBR.BP.9730/21.04.018/2017-18 dated April 27, 2018 the Bank has an option to spread the impact of change in gratuity ceiling over four quarters beginning with the quarter ended March 31, 2018. The Bank had availed the option to spread the incremental gratuity expenditure over four quarters beginning with the quarter ended March 31, 2018. Accordingly, during the quarter ended March 31, 2018 the Bank has charged to the profit and loss account an amount of ` 1,785.97 Lakhs and there was an unamortised gratuity expenditure of ₹ 5,357.93 Lakhs. Based on the correspondence with the Reserve Bank of India (RBI) during the quarter ended June 30, 2018, the Bank has charged to the profit and loss account the entire unamortised gratuity expenditure of ₹ 5,357.93 Lakhs.


 




10


Previous period's / year's figures have been regrouped / reclassified, where necessary to conform to current period's classification.


 




































 




































 




































 




































 




































 




































 




































 




















 SHYAM SRINIVASAN


 




Mumbai










 MANAGING DIRECTOR & CEO


 




January 17, 2019










 (DIN: 02274773)


 





















 




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