REG - Federal Bank Ltd The - Annual Financial Results <Origin Href="QuoteRef">FED.NS</Origin>

Federal BankAnnouncement

04/05/2017 07:30

RNS Number : 1556E
Federal Bank Ltd (The)
04 May 2017
 
 
SDF-24/  /2017-18 04th May 2017
   
To,
The London Stock Exchange
Dear Sir,
We enclose herewith the Annual Audited Financial Results of the Bank for the period ended March 31, 2017 which was approved at the Bank's Board of Directors meeting held on 28th April 2017.
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
 
Independent Auditors' Report
To the Board of Directors of 
The Federal Bank Limited
Report on the Standalone Financial Results
1. We have audited the accompanying Statement of Standalone Financial Results of The Federal Bank Limited ('the Bank') for the year ended 31 March 2017, attached herewith, being submitted by the Bank pursuant to the requirement of Regulation 33 of the Securities and Exchange Board of India (Listing Obligations and Disclosures Requirements) Regulations, 2015 ('the SEBI Regulations'). Further, disclosures relating to 'Pillar 3 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 aforesaid financial results have not been audited by us. Attention is drawn to the fact that the figures for the quarter ended 31 March 2017 and the corresponding quarter ended in the previous year as reported in these financial results are the balancing figures between audited figures in respect of the full financial year and the published year to date figures up to the end of the third quarter of the relevant financial year. Also the figures for each of the three quarters have only been reviewed and not been subjected to audit.
Management's Responsibility for the Standalone Financial Results
2. These standalone financial results have been prepared on the basis of the annual standalone financial statements and reviewed quarterly financial results which are the responsibility of the Bank's Management and approved by the Board of Directors in their meeting held on 28 April 2017. Our responsibility is to express an opinion on these financial results based on our audit of the annual financial statements, which have been prepared in accordance with the provisions of Section 29 of the Banking Regulation Act, 1949 along with the applicable accounting standards specified under Section 133 of the Companies Act, 2013 ('the Act'), read with rule 7 of the Companies (Accounts) Rules, 2014, and other accounting principles generally accepted in India, including, circulars and guidelines issued by Reserve Bank of India ('RBI') from time to time and in compliance with Regulation 33 of the SEBI Regulations.
Auditors' Responsibility
3. We conducted our audit in accordance with the Standards on Auditing ('the Standards') specified under Section 143(10) of the Act. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the standalone financial results are free from material misstatements. An audit includes examining, on a test basis, evidence supporting the amounts disclosed as financial results. An audit also includes assessing the accounting principles used and significant estimates made by the management. We believe that our audit provides a reasonable basis for our opinion.
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 Auditors' Report (Continued)
The Federal Bank Limited
Opinion
4. In our opinion and to the best of our information and according to the explanations given to us, these financial results:
i) are presented in accordance with the requirements of Regulation 33 of the SEBI Regulations in this regard; and
ii) give a true and fair view of the net profit and other financial information of the Bank for the year ended 31 March 2017 in accordance with the framework as explained in paragraph 2 above. 
Other Matters
5. The annual standalone financial results of the Bank for the year ended 31 March 2016 were audited by pair of auditors who expressed an unmodified opinion on those statements on 30 April 2016.
6. The standalone financial results incorporate the relevant returns of 40 Branches and Treasury Branch audited by either of us and audited returns in respect of 1,231 branches audited by other branch auditors and unaudited return in respect of 1 branch. The Branches audited by us cover 46.50% of the advances portfolio (excluding outstanding of asset recovery branches and food credit advance) of the Bank and 28.36% of non-performing advances of the Bank. The unaudited branch accounts for 0.20% of advances and 2.64% of non-performing advances of the Bank. 
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








Venkataramanan Vishwanath
Sanjay Khemani
Partner
Partner
Membership No: 113156
Membership No: 044577
Mumbai
Kochi
28 April 2017 
28 April 2017 

THE FEDERAL BANK LIMITED
REGD.OFFICE: P.B.NO. 103, FEDERAL TOWERS, ALUVA-683101
(CIN: L65191KL1931PLC000368)
AUDITED FINANCIAL RESULTS FOR THE QUARTER AND YEAR ENDED MARCH 31, 2017








(` in Lakhs) 
Particulars
Quarter ended 
Year ended
Consolidated figures for the year ended
31.03.2017
31.12.2016
31.03.2016
31.03.2017
31.03.2016
31.03.2017
31.03.2016
Audited
(Refer Note 12 below)
Unaudited
Audited
(Refer Note 12 below)
Audited
Audited
Audited
Audited
1. Interest earned (a)+(b)+(c)+(d)
 231,595 
 228,142 
 202,667 
 867,739 
 774,815 
 878,327 
 782,626 
(a)
Interest/discount on advances/bills
 173,644 
 171,622 
 146,949 
 654,568 
 566,931 
 665,610 
 574,818 
(b)
Income on investments
 48,382 
 45,122 
 45,996 
 180,140 
 176,309 
 179,686 
 176,233 
(c)
Interest on balances with Reserve Bank of India and other inter bank funds
 3,598 
 3,494 
 725 
 9,893 
 5,596 
 9,893 
 5,596 
(d)
Others
 5,971 
 7,904 
 8,997 
 23,138 
 25,979 
 23,138 
 25,979 
2. Other Income
 28,211 
 27,467 
 23,627 
 108,181 
 80,820 
 108,377 
 80,837 
3. TOTAL INCOME (1+2)
 259,806 
 255,609 
 226,294 
 975,920 
 855,635 
 986,704 
 863,463 
4. Interest expended
 147,356 
 149,003 
 134,058 
 562,475 
 524,045 
 565,258 
 525,935 
5. Operating expenses (i)+(ii)
 57,529 
 59,116 
 52,784 
 220,954 
 189,212 
 225,250 
 193,160 
(i)
Employees cost
 26,303 
 31,972 
 29,304 
 116,375 
 105,285 
 118,934 
 107,422 
(ii)
Other operating expenses
 31,226 
 27,144 
 23,480 
 104,579 
 83,927 
 106,316 
 85,738 
6. TOTAL EXPENDITURE (4+5)
(excluding provisions and contingencies)
 204,885 
 208,119 
 186,842 
 783,429 
 713,257 
 790,508 
 719,095 
7. OPERATING PROFIT (3-6)
(Profit before provisions and contingencies)
 54,921 
 47,490 
 39,452 
 192,491 
 142,378 
 196,196 
 144,368 
8. Provisions (other than Tax) and Contingencies
 12,270 
 15,882 
 38,864 
 61,841 
 70,413 
 61,999 
 70,517 
9. Exceptional Items

 - 
 - 
 - 
 - 
 - 
 - 
 - 
10. Profit from Ordinary Activities before tax (7-8-9)
 42,651 
 31,608 
 588 
 130,650 
 71,965 
 134,197 
 73,851 
11. Tax expense

 16,992 
 11,043 
 (438)
 47,571 
 24,400 
 48,866 
 25,061 
12. Net Profit from Ordinary Activities after tax (10-11)
 25,659 
 20,565 
 1,026 
 83,079 
 47,565 
 85,331 
 48,790 
13. Extraordinary items (net of tax expense)

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

 25,659 
 20,565 
 1,026 
 83,079 
 47,565 
 85,331 
 48,790 
15. Share in Profit/(Loss) of Associate






 1,355 
 (148)
16. Consolidated Net Profit of the group (14+15)





 86,686 
 48,642 
17. Paid-up Equity Share Capital
(Face value ` 2/- per Equity Share) 
 34,481 
 34,443 
 34,379 
 34,481 
 34,379 
 34,481 
 34,379 
18. Reserves excluding Revaluation Reserve 



 859,256 
 774,242 
 860,155 
 771,533 
19. Analytical Ratios








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








Under Basel III
 12.39 
 12.28 
 13.93 
 12.39 
 13.93 
 - 
 - 
(iii)
Earnings per Share (EPS) (in `)








(a) Basic EPS (before and after extra ordinary items)
1.49*
1.20*
0.06*
4.83
2.77
5.04
2.83

(b) Diluted EPS (before and after extra ordinary items)
1.46*
1.18*
0.06*
4.76
2.75
4.96
2.82
(iv)
NPA Ratios








a) Gross NPA
 172,705 
 195,155 
 166,777 
 172,705 
 166,777 



b) Net NPA
 94,120 
 110,237 
 95,001 
 94,120 
 95,001 



c) % of Gross NPA
 2.33 
 2.77 
 2.84 
 2.33 
 2.84 



d) % of Net NPA
 1.28 
 1.58 
 1.64 
 1.28 
 1.64 


(v)
Return on Assets (%)
0.24 * 
0.20 *
0.01* 
 0.84 
 0.57 











* Not Annualised







Segment Information@















(` in Lakhs) 
Particulars
Quarter ended
Year ended
Consolidated figures for the year ended
31.03.2017
31.12.2016
31.03.2016
31.03.2017
31.03.2016
31.03.2017
31.03.2016
Audited
(Refer Note 12 below)
Unaudited
Audited
(Refer Note 12 below)
Audited
Audited
Audited
Audited
Segment Revenue:








Treasury 
 63,666 
 65,168 
 59,193 
 249,634 
 228,193 
 249,634 
 228,193 

Corporate/Wholesale Banking
 84,065 
 68,739 
 67,702 
 300,671 
 236,094 
 300,671 
 236,094 

Retail Banking
 107,372 
 116,437 
 92,787 
 410,350 
 380,964 
 421,134 
 388,792 

Other Banking operations
 4,703 
 5,265 
 6,612 
 15,265 
 10,384 
 15,265 
 10,384 

Unallocated
 - 
 - 
 - 
 - 
 - 
 - 
 - 

Total Revenue
 259,806 
 255,609 
 226,294 
 975,920 
 855,635 
 986,704 
 863,463 

Less: Inter Segment Revenue
 - 
 - 
 - 
 - 
 - 
 - 
 - 

Income from Operations
 259,806 
 255,609 
 226,294 
 975,920 
 855,635 
 986,704 
 863,463 
Segment Results (net of provisions):








Treasury 
 6,956 
 8,779 
 3,172 
 39,514 
 15,852 
 39,514 
 15,851 

Corporate/Wholesale Banking
 12,044 
 4,062 
 (5,324)
 19,641 
 1,814 
 19,641 
 1,814 

Retail Banking
 23,211 
 17,222 
 (2,062)
 68,799 
 49,459 
 72,346 
 51,345 

Other Banking operations
 1,256 
 2,386 
 5,532 
 5,603 
 7,385 
 5,603 
 7,385 

Unallocated
 (816)
 (841)
 (730)
 (2,907)
 (2,545)
 (2,907)
 (2,544)

Profit before tax
 42,651 
 31,608 
 588 
 130,650 
 71,965 
 134,197 
 73,851 
Segment Assets









Treasury 
 3,900,028 
 3,813,929 
 3,334,198 
 3,900,028 
 3,334,198 
 3,896,880 
 3,329,695 

Corporate/Wholesale Banking
 3,138,461 
 3,400,648 
 2,483,667 
 3,138,461 
 2,483,667 
 3,138,461 
 2,483,667 

Retail Banking
 4,241,722 
 3,645,243 
 3,371,086 
 4,241,722 
 3,371,086 
 4,295,750 
 3,388,024 

Other Banking operations
 1,854 
 4,398 
 2,656 
 1,854 
 2,656 
 1,854 
 2,656 

Unallocated
 215,628 
 285,520 
 245,196 
 215,628 
 245,196 
 215,628 
 245,196 

Total
 11,497,693 
 11,149,738 
 9,436,803 
 11,497,693 
 9,436,803 
 11,548,573 
 9,449,238 
Segment Liabilities









Treasury 
 3,618,865 
 3,510,701 
 3,067,275 
 3,618,865 
 3,067,275 
 3,618,865 
 3,067,275 

Corporate/Wholesale Banking
 2,950,151 
 3,259,778 
 2,337,684 
 2,950,151 
 2,337,684 
 2,950,151 
 2,337,684 

Retail Banking
 3,992,625 
 3,500,018 
 3,178,818 
 3,992,625 
 3,178,818 
 4,042,607 
 3,193,963 

Other Banking operations
 - 
 - 
 - 
 - 
 - 
 - 
 - 

Unallocated
 41,814 
 11,396 
 43,904 
 41,814 
 43,904 
 41,814 
 43,904 

Total
 10,603,455 
 10,281,893 
 8,627,681 
 10,603,455 
 8,627,681 
 10,653,437 
 8,642,826 
Capital employed:







(Segment Assets - Segment Liabilities)








Treasury 
 281,163 
 303,228 
 266,923 
 281,163 
 266,923 
 278,015 
 262,420 

Corporate/Wholesale Banking
 188,310 
 140,870 
 145,983 
 188,310 
 145,983 
 188,310 
 145,983 

Retail Banking
 249,097 
 145,225 
 192,268 
 249,097 
 192,268 
 253,143 
 194,061 

Other Banking operations
 1,854 
 4,398 
 2,656 
 1,854 
 2,656 
 1,854 
 2,656 

Unallocated
 173,814 
 274,124 
 201,292 
 173,814 
 201,292 
 173,814 
 201,292 

Total
 894,238 
 867,845 
 809,122 
 894,238 
 809,122 
 895,136 
 806,412 
@
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. 

Statement of Assets and Liabilities of the bank as on March 31, 2017 is given below:










(` in Lakhs)



Particulars
Standalone
Consolidated



As at 31.03.2017 
As at 31.03.2016 
As at 31.03.2017 
As at 31.03.2016 



Audited
Audited
Audited
Audited



CAPITAL AND LIABILITIES







Capital 
34,481
34,379
34,481
34,379



Reserves and Surplus
859,757
774,743
860,655
772,033



Deposits
9,766,456
7,917,171
9,766,208
7,917,090



Borrowings
589,732
511,456
634,549
523,632



Other Liabilities and Provisions
247,267
220,388
252,680
223,439



Total
11,497,693
9,458,137
11,548,573
9,470,573



ASSETS







Cash and Balances with Reserve Bank of India
457,657
377,454
457,827
377,696



Balance with Banks and Money at Call and Short Notice
287,560
164,527
287,637
164,618



Investments
2,819,609
2,515,549
2,791,226
2,492,047



Advances
7,333,627
5,809,014
7,408,623
5,841,977



Fixed Assets
48,947
51,998
49,234
52,364



Other Assets
550,293
539,595
554,026
541,871



Total
11,497,693
9,458,137
11,548,573
9,470,573


Notes:







1
The above Audited Financial Results for the quarter and year ended March 31, 2017 were reviewed by the Audit Committee and approved by the Board of Directors at its meeting held onApril 28, 2017. These Results have been subjected to "Audit" by the Statutory Central Auditors of the Bank and an unqualified report has been issued by them.
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
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. 
4
The divergence observed by RBI for the Financial year 2015-16 in respect of the Bank's asset classification and provisioning under the extant prudential norms on income recognition, asset classification and provisioning is insignificant and hence the disclosure in the Notes to the Audited Financial Statements for the year ended 31 March 2017, as required under RBI Circular DBR.BP.BC.No.63/21.04.018/2016-17 dated April 18, 2017 on 'Divergence in the asset classification and provisioning', is not required to be made. 









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 operation 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 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 and ` 8,673.16 Lakhs for the Quarter and year ended March 31,2017 respectively and there is no unamortised balance carried forward as on March 31, 2017.
8
During the quarter and year ended March 31,2017, the Bank allotted 19,02,809 and 50,98,570 equity shares respectively, pursuant to the exercise of stock options by certain employees.









9
Pursuant to RBI Circular FMRD.DIRD.10/14.03.002/2015-16 dated May 19, 2016, as amended, the bank has with effect from October 3, 2016 considered its repo/reverse repo transactions under Liquidity Adjustment Facility (LAF) and Marginal Standing Facility (MSF) of RBI as Borrowings/Lendings, as the case may be. Hitherto, the repo/ reverse repo transactions were included under Investments. Figures for the previous periods have been regrouped / reclassified to conform to current period's classification. The above regrouping / reclassification has no impact on the profit of the bank for the quarter / year ended March 31, 2017 or the previous periods/year.
10
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.









11
The figures for the periods prior to September 30, 2016 were reviewed / audited by previous statutory auditors.
12
The figures of the last quarter are the balancing figures between the audited figures in respect of the full financial year and the published year to date figures upto the end of third quarter of the respective financial year.
13
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 
April 28, 2017

(DIN: 02274773) 










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