REG - Federal Bank Ltd The - 3rd Quarter Results
SDF-24/ /2019-20 22nd January 2020
To,
The London Stock Exchange
Sub: Outcome of Board Meeting and submission of Unaudited Standalone and Consolidated Financial Results and Limited Review Report for the third quarter and nine months period ended 31st December 2019
Dear Sir,
This is to inform you that the Board of Directors of the Company at their meeting held on Monday, 20th January 2020 at Mumbai, has approved and adopted the Bank's unaudited standalone and consolidated financial results for the third quarter and nine months period ended 31st December 2019. The Limited Review Report submitted by the Statutory Auditors of the Company is also enclosed herewith.
Kindly take the same on your record.
For The Federal Bank Limited
Samir P Rajdev
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 the unaudited quarterly standalone financial results and standalone year to date financial results of The Federal Bank Limited pursuant to Regulation 33 of the Securities and Exchange Board of India (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 2019 and year to date results for the period from 1 April 2019 to 31 December 2019 (the 'Statement'), except for the disclosures relating to "Pillar 3 under Basel III Capital Regulations", and those relating to "Leverage Ratio", "Liquidity Coverage Ratio" under Capital Adequacy and Liquidity Standards issued by Reserve Bank of India ('RBI') 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. This Statement is the responsibility of the Bank's Management and has been approved by the Board of Directors. 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 financial statements are free of material misstatement. A review is limited primarily to inquiries of company 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. The Statement incorporate the relevant returns of 95 Branches and Treasury Branch reviewed by either of us and un-reviewed returns in respect of 1,160 branches. The Branches reviewed by us cover 50.53% of the advances portfolio (excluding outstanding of asset recovery branches and food credit advance) of the Bank and 51.16% of non-performing advances of the Bank.
Limited review report on the unaudited quarterly standalone financial results and standalone year to date financial results of The Federal Bank Limited pursuant to Regulation 33 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Continued)
4. Based on our review conducted as above, nothing has come to our attention that causes us to believe that the accompanying Statement of Unaudited Standalone Financial Results prepared in accordance with applicable accounting standards and other recognized accounting practices and policies 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 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
ICAI UDIN: 20046768AAAABZ6772
ICAI UDIN: 20044577AAAAAA4743
Mumbai
Mumbai
20 January 2020
20 January 2020
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
Independent Auditor's Review Report on consolidated unaudited quarterly and year to date financial results of The Federal Bank Limited pursuant to Regulation 33 of the Securities and Exchange Board of India (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 Consolidated Financial Results of The Federal Bank Limited (the 'Bank'/ the 'Parent') and its subsidiaries (the Parent and its subsidiaries together referred to as the 'Group'), and its share of the net profit after tax of its associates for the quarter ended 31 December 2019 and year to date results for the period from 1 April 2019 to 31 December 2019 (the 'Statement'), being submitted by the Bank pursuant to the requirement of Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended, except for the disclosures relating to consolidated Pillar 3 disclosure as at 31 December 2019, 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. Attention is drawn to the fact that the consolidated figures for the corresponding quarter ended 31 December 2018 and the corresponding period from 1 April 2018 to 31 December 2018, as reported in the Statement have been approved by the Bank's Board of Directors, but have not been subjected to review by us since the requirement of submission of quarterly consolidated financial results has become mandatory only from 1 April 2019.
2. This Statement, which is the responsibility of the Parent's Management and approved by the Parent's Board of Directors, has been prepared in accordance with the recognition and measurement principles laid down in Accounting Standard 25 "Interim Financial Reporting" ('AS 25'), prescribed under Section 133 of the Companies Act, 2013, the relevant provisions of the Banking Regulation Act, 1949, the circulars, guidelines and directions issued by the Reserve Bank of India (RBI) from time to time ('RBI Guidelines') and other accounting principles generally accepted in India. Our responsibility is to express a conclusion on the Statement based on our review.
Independent Auditor's Review Report on consolidated unaudited quarterly and year to date financial results of The Federal Bank Limited pursuant to Regulation 33 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Continued)
3. 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. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
We also performed procedures in accordance with the circular issued by the SEBI under Regulation 33 (8) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended, to the extent applicable
4. The Statement includes the results of the following entities:
a. Fedbank Financial Services Limited ('the Subsidiary')
b. Federal Operations and Services Limited ('the Subsidiary')
c. IDBI Federal Life Insurance Company Limited ('the Associate')
d. Equirus Capital Private Limited ('the Associate')
5. Based on our review conducted and procedures performed as stated in paragraph 3 above, and based on the consideration of the review report of the other auditor referred to in paragraph 6 below and based on our assessment of the Financial Results/ financial information certified by the Board of Directors as stated in paragraph 7 below, nothing has come to our attention that causes us to believe that the accompanying Statement, prepared in accordance with the recognition and measurement principles laid down in the aforesaid Accounting Standard, RBI Guidelines and other accounting principles generally accepted in India, has not disclosed the information required to be disclosed in terms of Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended, including the manner in which it is to be disclosed, except for the disclosures relating to consolidated Pillar 3 disclosure as at 31 December 2019, 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, or that it contains any material misstatement.
Independent Auditor's Review Report on consolidated unaudited quarterly and year to date financial results of The Federal Bank Limited pursuant to Regulation 33 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Continued)
6. We did not review the interim financial results of two subsidiaries included in the Statement, whose interim financial results reflect total revenues of Rs. 13,072.47 lakhs and
Rs. 32,662.45 lakhs and total net profit after tax of Rs. 1,106.92 lakhs and Rs. 2,941.89 lakhs for the quarter ended 31 December 2019 and for the period from 1 April 2019 to
31 December 2019, respectively, as considered in the consolidated unaudited financial results These interim financial results have been reviewed by other auditors whose reports have been furnished to us by the Management and our conclusion on the Statement, in so far as it relates to the amounts and disclosures included in respect of these subsidiaries, associates and joint ventures, is based solely on the reports of the other auditors and the procedures performed by us as stated in paragraph 3 above.Our conclusion on the Statement is not modified in respect of the above matters.
7. The Statement also includes the Group's share of net profit after tax of Rs. 270.04 lakhs and Rs. 724.48 lakhs for the quarter ended 31 December 2019 and for the period from
1 April 2019 to 31 December 2019, respectively, as considered in the consolidated unaudited financial results, in respect of two associates, based on their interim financial results which have not been reviewed/ audited. According to the information and explanations given to us by the management, these financial results are not material to the Group.Our conclusion on the Statement is not modified in respect of the above matter.
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
ICAI UDIN: 20046768AAAACA3829
ICAI UDIN: 20044577AAAAAB1120
Mumbai
Mumbai
20 January 2020
20 January 2020
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, 2019
(` in Lakhs)
Particulars
Quarter ended
Nine months ended
Year ended
31.12.2019
30.09.2019
31.12.2018
31.12.2019
31.12.2018
31.03.2019
Unaudited
Unaudited
Unaudited
Unaudited
Unaudited
Audited
1. Interest earned (a)+(b)+(c)+(d)
3,33,036
3,25,425
2,95,441
9,81,391
8,38,671
11,41,903
(a)
Interest/discount on advances/bills
2,70,278
2,63,766
2,38,662
7,94,652
6,67,657
9,08,962
(b)
Income on investments
53,611
52,744
50,558
1,61,878
1,50,107
2,03,745
(c)
Interest on balances with Reserve Bank of India and other inter bank funds
3,527
3,811
1,557
9,310
6,169
7,347
(d)
Others
5,620
5,104
4,664
15,551
14,738
21,849
2. Other income
40,786
42,092
34,555
1,22,030
93,930
1,35,102
3. TOTAL INCOME (1+2)
3,73,822
3,67,517
3,29,996
11,03,421
9,32,601
12,77,005
4. Interest expended
2,17,543
2,13,047
1,87,712
6,38,102
5,30,689
7,24,268
5. Operating expenses (i)+(ii)
81,897
82,590
71,501
2,40,781
2,01,077
2,76,427
(i)
Employees cost
41,476
44,070
35,366
1,25,330
1,00,761
1,37,776
(ii)
Other operating expenses
40,421
38,520
36,135
1,15,451
1,00,316
1,38,651
6. TOTAL EXPENDITURE (4+5)
(excluding provisions and contingencies)2,99,440
2,95,637
2,59,213
8,78,883
7,31,766
10,00,695
7. OPERATING PROFIT (3-6)
(Profit before provisions and contingencies)74,382
71,880
70,783
2,24,538
2,00,835
2,76,310
8. Provisions (other than tax) and contingencies
16,086
25,177
19,012
60,467
67,809
85,585
9. Exceptional items
-
-
-
-
-
-
10. Profit from Ordinary Activities before tax
(7-8-9)58,296
46,703
51,771
1,64,071
1,33,026
1,90,725
11. Tax expense
14,232
5,033
18,408
39,916
46,788
66,336
12. Net Profit from Ordinary Activities after tax (10-11)
44,064
41,670
33,363
1,24,155
86,238
1,24,389
13. Extraordinary items (net of tax expense)
-
-
-
-
-
-
14. Net Profit for the period (12-13)
44,064
41,670
33,363
1,24,155
86,238
1,24,389
15. Paid-up Equity Share Capital
(Face value ` 2/- per Equity Share)39,846
39,762
39,678
39,846
39,678
39,701
16. Reserves excluding Revaluation Reserve
12,87,102
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
13.64
13.98
12.97
13.64
12.97
14.14
(iii)
Earnings per Share (EPS) (in `)
(a) Basic EPS (before and after extra ordinary items)
2.21*
2.10*
1.68*
6.25*
4.36*
6.28
(b) Diluted EPS (before and after extra ordinary items)
2.20*
2.08*
1.67*
6.21*
4.33*
6.24
(iv)
NPA Ratios
a) Gross NPA
3,61,869
3,61,211
3,36,123
3,61,869
3,36,123
3,26,068
b) Net NPA
1,94,101
1,84,364
1,81,729
1,94,101
1,81,729
1,62,620
c) % of Gross NPA
2.99
3.07
3.14
2.99
3.14
2.92
d) % of Net NPA
1.63
1.59
1.72
1.63
1.72
1.48
(v)
Return on Assets (%)
0.26*
0.26*
0.23*
0.77*
0.62*
0.88
* Not Annualised
Segment Information@
(` in Lakhs)
Particulars
Quarter ended
Nine months ended
Year ended
31.12.2019
30.09.2019
31.12.2018
31.12.2019
31.12.2018
31.03.2019
Unaudited
Unaudited
Unaudited
Unaudited
Unaudited
Audited
Segment Revenue:
Treasury
70,179
68,830
64,236
2,11,973
1,88,247
2,54,761
Corporate/Wholesale Banking
1,35,913
1,38,806
1,30,916
4,22,800
3,62,297
5,07,376
Retail Banking
1,60,131
1,52,491
1,28,913
4,47,953
3,66,489
4,88,342
Other Banking operations
7,599
7,390
5,931
20,695
15,568
26,526
Unallocated
-
-
-
-
-
-
Total Revenue
3,73,822
3,67,517
3,29,996
11,03,421
9,32,601
12,77,005
Less: Inter Segment Revenue
-
-
-
-
-
-
Income from Operations
3,73,822
3,67,517
3,29,996
11,03,421
9,32,601
12,77,005
Segment Results (net of provisions):
Treasury
15,456
12,259
16,870
43,167
30,134
41,085
Corporate/Wholesale Banking
(11,340)
(4,633)
4,728
2,801
11,641
25,969
Retail Banking
54,381
39,012
30,613
1,19,712
91,998
1,20,186
Other Banking operations
620
2,157
444
1,849
1,410
6,690
Unallocated
(821)
(2,092)
(884)
(3,458)
(2,157)
(3,205)
Profit before tax
58,296
46,703
51,771
1,64,071
1,33,026
1,90,725
Segment Assets
Treasury
35,19,353
34,09,896
30,72,544
35,19,353
30,72,544
35,75,297
Corporate/Wholesale Banking
60,00,398
59,08,518
56,43,373
60,00,398
56,43,373
58,16,960
Retail Banking
65,35,673
62,19,085
53,95,943
65,35,673
53,95,943
56,68,073
Other Banking operations
2,049
1,927
2,057
2,049
2,057
1,138
Unallocated
12,21,607
11,03,023
8,64,000
12,21,607
8,64,000
8,72,531
Total
1,72,79,080
1,66,42,449
1,49,77,917
1,72,79,080
1,49,77,917
1,59,33,999
Segment Liabilities
Treasury
34,06,295
32,85,495
29,23,393
34,06,295
29,23,393
34,76,144
Corporate/Wholesale Banking
59,22,863
57,97,969
54,71,439
59,22,863
54,71,439
56,00,730
Retail Banking
64,58,732
61,07,417
52,34,444
64,58,732
52,34,444
54,61,130
Other Banking operations
14
-
2
14
2
4
Unallocated
70,038
76,137
59,914
70,038
59,914
68,687
Total
1,58,57,942
1,52,67,018
1,36,89,192
1,58,57,942
1,36,89,192
1,46,06,695
Capital employed:
(Segment Assets - Segment Liabilities)
Treasury
1,13,058
1,24,401
1,49,151
1,13,058
1,49,151
99,153
Corporate/Wholesale Banking
77,535
1,10,549
1,71,934
77,535
1,71,934
2,16,230
Retail Banking
76,941
1,11,668
1,61,499
76,941
1,61,499
2,06,943
Other Banking operations
2,035
1,927
2,055
2,035
2,055
1,134
Unallocated
11,51,569
10,26,886
8,04,086
11,51,569
8,04,086
8,03,844
Total
14,21,138
13,75,431
12,88,725
14,21,138
12,88,725
13,27,304
@
For the above segment reporting, the reportable segments are identified as 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, 2019 were reviewed by the Audit Committee and approved by the Board of Directors at its meeting held on January 20, 2020. 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 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, 2019.
3
The working results have been arrived at after considering provision for standard assets, including requirements for exposures to entities with Unhedged Foreign Currency Exposures, non-performing assets (NPAs), depreciation on investments, income-tax and other usual and necessary provisions.
4
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.
5
During the quarter ended June 30, 2018, as per RBI Circular, the Bank had exercised the option of spreading the provision for Mark to Market (MTM) losses of ` 5,893.97 Lakhs equally over 4 quarters and accordingly unamortised MTM losses of ` 4,420.48 Lakhs were deferred to be amortised in remaining quarters of FY 2019, which was fully amortised in FY 2019.
6
The Capital Adequacy Ratio is computed on the basis of RBI guidelines applicable on the relevant reporting dates and the ratio for the corresponding previous period is not adjusted to consider the impact of subsequent changes if any, in the guidelines.
7
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 part of Indian operations.
8
During the quarter and nine months ended December 31, 2019, the Bank has allotted 4,158,177 and 7,226,229 equity shares of ` 2 each, pursuant to the exercise of stock options by employees.
9
During the quarter ended September 30, 2019, the Bank had elected to exercise the option permitted under section 115BAA of the Income Tax Act, 1961 as introduced by the Taxation Laws (Amendment) Ordinance, 2019. Accordingly, the Bank has recognised Provision for Income Tax for quarter and nine months ended December 31, 2019 and re-measured its Deferred tax liability basis the rate prescribed in the aforesaid section and recognized the effect of change by revising the annual effective income tax rate.
10
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.
11
During the quarter ended December 31, 2019, the Bank has invested ` 500.00 Lakhs in the Preference share capital of its subsidiary Federal Operations and Services Limited.
12
During the quarter ended December 31, 2019 the Bank has decided to use actuarial valuation for the estimation of debit card loyalty points liability on a quarterly basis as against the earlier practice of taking actuarial valuation only on an annual basis. This has resulted in a lower provision charge by ` 842.79 lakhs (net of taxes) in the current quarter.
13
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 20, 2020
(DIN: 02274773)
THE FEDERAL BANK LIMITED
REGD.OFFICE: P.B.NO. 103, FEDERAL TOWERS, ALUVA-683101
(CIN: L65191KL1931PLC000368)
CONSOLIDATED UNAUDITED FINANCIAL RESULTS FOR THE QUARTER AND NINE MONTHS ENDED DECEMBER 31, 2019
(` in Lakhs)
Particulars
Quarter ended
Nine months ended
Year ended
31.12.2019
30.09.2019
31.12.2018
31.12.2019
31.12.2018
31.03.2019
Unaudited
Unaudited
Unaudited
Unaudited
Unaudited
Audited
1. Interest earned (a)+(b)+(c)+(d)
3,41,395
3,33,675
3,00,272
10,04,591
8,52,879
11,63,544
(a)
Interest/discount on advances/bills
2,78,601
2,72,087
2,43,441
8,17,740
6,81,706
9,30,412
(b)
Income on investments
53,647
52,674
50,610
1,61,990
1,50,266
2,03,936
(c)
Interest on balances with Reserve Bank of India and other inter bank funds
3,527
3,810
1,557
9,310
6,169
7,347
(d)
Others
5,620
5,104
4,664
15,551
14,738
21,849
2. Other income
42,076
41,169
34,606
1,20,342
94,010
1,33,522
3. TOTAL INCOME (1+2)
3,83,471
3,74,844
3,34,878
11,24,933
9,46,889
12,97,066
4. Interest expended
2,20,564
2,15,422
1,89,627
6,45,694
5,36,263
7,31,633
5. Operating expenses (i)+(ii)
86,872
86,305
73,345
2,52,254
2,05,967
2,83,658
(i)
Employees cost
44,365
46,321
36,602
1,32,227
1,04,056
1,42,566
(ii)
Other operating expenses
42,507
39,984
36,743
1,20,027
1,01,911
1,41,092
6. TOTAL EXPENDITURE (4+5)
(excluding provisions and contingencies)3,07,436
3,01,727
2,62,972
8,97,948
7,42,230
10,15,291
7. OPERATING PROFIT (3-6)
(Profit before provisions and contingencies)76,035
73,117
71,906
2,26,985
2,04,659
2,81,775
8. Provisions (other than tax) and contingencies
16,254
25,343
19,180
60,928
67,734
85,765
9. Exceptional items
-
-
-
-
-
-
10. Profit from Ordinary Activities before tax
(7-8-9)59,781
47,774
52,726
1,66,057
1,36,925
1,96,010
11. Tax expense
14,609
5,334
18,637
41,075
47,780
67,758
12. Net Profit from Ordinary Activities after tax (10-11)
45,172
42,440
34,089
1,24,982
89,145
1,28,252
13. Extraordinary items (net of tax expense)
-
-
-
-
-
-
14. Net Profit for the period (12-13)
45,172
42,440
34,089
1,24,982
89,145
1,28,252
15. Minority interest
280
129
136
591
136
180
16. Share in Profit of Associates
270
223
27
725
327
3,556
17. Consolidated Net Profit of the group
(14-15+16)45,162
42,534
33,980
1,25,116
89,336
1,31,628
18. Paid-up Equity Share Capital
(Face value ` 2/- per Equity Share)39,846
39,762
39,678
39,846
39,678
39,701
19. Reserves excluding Revaluation Reserve
13,09,624
20. Analytical Ratios
(i)
Percentage of shares held by Government of India
NIL
NIL
NIL
NIL
NIL
NIL
(ii)
Capital Adequacy ratio (%)
Under Basel III
13.88
14.32
13.26
13.88
13.26
14.43
(iii)
Earnings per Share (EPS) (in `)
(a) Basic EPS (before and after extra ordinary items)
2.27*
2.14*
1.71*
6.29*
4.51*
6.65
(b) Diluted EPS (before and after extra ordinary items)
2.26*
2.13*
1.70*
6.26*
4.49*
6.60
(iv)
NPA Ratios
a) Gross NPA
3,65,657
3,65,317
3,39,473
3,65,657
3,39,473
3,30,178
b) Net NPA
1,97,379
1,87,941
1,84,706
1,97,379
1,84,706
1,66,218
c) % of Gross NPA
2.97
3.06
3.14
2.97
3.14
2.92
d) % of Net NPA
1.63
1.60
1.73
1.63
1.73
1.49
(v)
Return on Assets (%)
0.26*
0.26*
0.23*
0.75*
0.62*
0.88
* Not Annualised
Segment Information@
(` in Lakhs)
Particulars
Quarter ended
Nine months ended
Year ended
31.12.2019
30.09.2019
31.12.2018
31.12.2019
31.12.2018
31.03.2019
Unaudited
Unaudited
Unaudited
Unaudited
Unaudited
Audited
Segment Revenue:
Treasury
70,179
68,830
64,236
2,09,890
1,88,247
2,54,761
Corporate/Wholesale Banking
1,35,913
1,38,806
1,30,916
4,22,800
3,62,297
5,07,376
Retail Banking
1,69,780
1,59,818
1,33,795
4,71,548
3,80,777
5,08,403
Other Banking operations
7,599
7,390
5,931
20,695
15,568
26,526
Unallocated
-
-
-
-
-
-
Total Revenue
3,83,471
3,74,844
3,34,878
11,24,933
9,46,889
12,97,066
Less: Inter Segment Revenue
-
-
-
-
-
-
Income from Operations
3,83,471
3,74,844
3,34,878
11,24,933
9,46,889
12,97,066
Segment Results (net of provisions):
Treasury
15,456
12,258
16,848
41,052
30,518
41,469
Corporate/Wholesale Banking
(11,339)
(4,633)
4,728
2,801
11,641
25,969
Retail Banking
55,821
40,043
31,590
1,23,709
95,513
1,25,087
Other Banking operations
664
2,198
444
1,953
1,410
6,690
Unallocated
(821)
(2,092)
(884)
(3,458)
(2,157)
(3,205)
Profit before tax
59,781
47,774
52,726
1,66,057
1,36,925
1,96,010
Segment Assets
Treasury
35,21,335
34,11,608
30,72,811
35,21,335
30,72,811
35,78,232
Corporate/Wholesale Banking
60,00,398
59,08,518
56,43,373
60,00,398
56,43,373
58,16,960
Retail Banking
67,43,853
63,86,249
55,07,136
67,43,853
55,07,136
57,86,386
Other Banking operations
1,409
1,057
2,057
1,409
2,057
1,138
Unallocated
12,21,607
11,03,023
8,64,000
12,21,607
8,64,000
8,72,531
Total
1,74,88,602
1,68,10,455
1,50,89,377
1,74,88,602
1,50,89,377
1,60,55,247
Segment Liabilities
Treasury
34,06,295
32,85,495
29,23,393
34,06,295
29,23,393
34,76,144
Corporate/Wholesale Banking
59,22,863
57,97,969
54,71,439
59,22,863
54,71,439
56,00,730
Retail Banking
66,24,970
62,33,582
53,19,128
66,24,970
53,19,128
55,51,810
Other Banking operations
14
-
2
14
2
4
Unallocated
70,038
76,137
59,914
70,038
59,914
68,687
Total
1,60,24,180
1,53,93,183
1,37,73,876
1,60,24,180
1,37,73,876
1,46,97,375
Capital employed:
(Segment Assets - Segment Liabilities)
Treasury
1,15,040
1,26,113
1,49,418
1,15,040
1,49,418
1,02,088
Corporate/Wholesale Banking
77,535
1,10,549
1,71,934
77,535
1,71,934
2,16,230
Retail Banking
1,18,883
1,52,667
1,88,008
1,18,883
1,88,008
2,34,576
Other Banking operations
1,395
1,057
2,055
1,395
2,055
1,134
Unallocated
11,51,569
10,26,886
8,04,086
11,51,569
8,04,086
8,03,844
Total
14,64,422
14,17,272
13,15,501
14,64,422
13,15,501
13,57,872
@
For the above segment reporting, the reportable segments are identified as Treasury, Corporate/Wholesale Banking, Retail Banking and Other Banking Operations in compliance with the RBI guidelines.
Notes:
1
The above Consolidated Financial Results for the quarter and nine months ended December 31, 2019 were reviewed by the Audit Committee and subsequently taken on record and approved by the Board of Directors at its meeting held on January 20, 2020. These Results have been subjected to "Limited review" by the Statutory Central Auditors of the Bank and an unqualified review report has been issued. The figures for the quarter and nine months ended December 31, 2018 has been approved by the Bank's Board of Directors, but has not been subjected to review since the requirement of submission of quarterly consolidated financial results has become mandatory only from April 01, 2019.
2
The Consolidated Financial Results of the Group comprise the financial results of The Federal Bank Limited and its subsidiaries viz. Fedbank Financial Services Limited & Federal Operations and Services Limited and its associates viz. IDBI Federal Life Insurance Company Limited & Equirus Capital Private Limited.
3
There has been no material change in the accounting policies adopted during the quarter and nine months ended December 31, 2019 as compared to those followed for the year ended March 31, 2019.
4
The working results have been arrived at after considering provision for standard assets, including requirements for exposures to entities with Unhedged Foreign Currency Exposures, non-performing assets (NPAs), depreciation on investments, income-tax and other usual and necessary provisions.
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 etc.
6
During the quarter ended June 30, 2018, as per RBI Circular, the Bank had exercised the option of spreading the provision for Mark to Market (MTM) losses of ` 5,893.97 Lakhs equally over 4 quarters and accordingly unamortised MTM losses of ` 4,420.48 Lakhs were deferred to be amortised in remaining quarters of FY 2019, which was fully amortised in FY 2019.
7
The Capital Adequacy Ratio is computed on the basis of RBI guidelines applicable on the relevant reporting dates and the ratio for the corresponding previous period is not adjusted to consider the impact of subsequent changes if any, in the guidelines.
8
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.
9
During the quarter and nine months ended December 31, 2019, the Bank has allotted 4,158,177 and 7,226,229 equity shares of ` 2 each, pursuant to the exercise of stock options by employees.
10
During the quarter ended September 30, 2019, the Bank has elected to exercise the option permitted under section 115BAA of the Income Tax Act, 1961 as introduced by the Taxation Laws (Amendment) Ordinance, 2019. Accordingly, the Bank has recognised Provision for Income Tax for quarter and nine months ended December 31, 2019 and re-measured its Deferred tax liability basis the rate prescribed in the aforesaid section and recognized the effect of change by revising the annual effective income tax rate.
11
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.
12
During the quarter ended December 31, 2019, the Bank has invested ` 500.00 Lakhs in the Preference share capital of its subsidiary Federal Operations and Services Limited.
13
During the quarter ended December 31, 2019 the Bank has decided to use actuarial valuation for the estimation of debit card loyalty points liability on a quarterly basis as against the earlier practice of taking actuarial valuation only on an annual basis. This has resulted in a lower provision charge by ` 842.79 lakhs (net of taxes) in the current quarter.
14
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 20, 2020
(DIN: 02274773)
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