REG - Federal Bank Ltd The - Half-year Report

Federal BankAnnouncement

17/10/2019 13:05

RNS Number : 2620Q
Federal Bank Ltd (The)
17 October 2019
 


 
                                                                                                                    
SDF-24/         /2019-20                                                                  17th October 2019
 
                                                      
To,
The London Stock Exchange
 
 
Dear Sir,
We enclose herewith the Un- Audited Financial Results of the Bank for the period ended September 30, 2019 which was approved at the Bank's Board of Directors meeting held on 16th October 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




 
Limited review report on unaudited quarterly standalone financial results and standalone year to date financial results of The Federal Bank Limited pursuant to 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 30 September 2019 and year to date results for the period from 1 April 2019 to 30 September 2019  ('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, as amended ('Listing Regulations'), except for the disclosures relating to Pillar 3 disclosure as at 30 September 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 figures for the cash flow statement for the corresponding period from 1 April 2018 to 30 September 2018, as reported in these financial results 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 cash flow statement has become mandatory only from 1 April 2019.
 
2.   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 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 issue a report on the Statement based on our review.
 
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. 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 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 Standalone Financial Results incorporate the relevant returns of 117 Branches and Treasury Branch reviewed by either of us and un-reviewed returns in respect of 1,134 branches. These Branches cover 50.06% of the advances portfolio (excluding outstanding of asset recovery branches and food credit advance) of the Bank and 55.56% of non-performing advances of the Bank.
 
5.  Based on our review conducted as above, nothing has come to our attention that causes us to believe that the accompanying Statement prepared in accordance with applicable accounting standards and other recognised 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, except for the disclosures relating to Pillar 3 disclosure as at 30 September 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 or that it has not been prepared in accordance with the relevant prudential norms issued by the Reserve Bank 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:19046768AAABMY3113


 ICAI UDIN:19044577AAAABB4135
 




 


 




Mumbai


Mumbai




16 October 2019  


16 October 2019




 
 
 
Limited review report on unaudited quarterly consolidated financial results and consolidated year to date financial results of The Federal Bank Limited pursuant to 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 Consolidated Financial Results of The Federal Bank Limited (" the Bank") and its subsidiaries (the Bank 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 30 September 2019 and year to date results for the period from 1 April 2019 to 30 September 2019 ("the Statement"), attached herewith, being submitted by the Bank pursuant to the requirements of Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended ('Listing Regulations'), except for the disclosures relating to Pillar 3 disclosure as at 30 September 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 30 September 2018, the corresponding period from 1 April 2018 to 30 September 2018 and the cash flow statement for the corresponding period from 1 April 2018 to 30 September 2018, as reported in these financial results 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 and cashflow statement has become mandatory only from 1 April 2019.
 
2.   This Statement, which is the responsibility of the Bank's management and approved by the Bank'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 issue a report on the Statement based on our review.
 
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 Listing Regulations, 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 reports of the other auditors referred to in paragraph 6 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 Listing Regulations, as amended, including the manner in which it is to be disclosed, except for the disclosures relating to Pillar 3 disclosure as at 30 September 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.
 
6.   We did not review the interim financial results of two subsidiaries included in the Statement whose unaudited interim financial results reflect total assets of Rs. 284,849 lakhs as at 30 September 2019 and total revenues of Rs. 10,661 lakhs and Rs. 19,590 lakhs, total net profit after tax of Rs. 771 lakhs and Rs. 1,835 lakhs for the quarter ended 30 September 2019 and for the period from 1 April 2019 to 30 September 2019, respectively, and cash flows (net) of Rs 3,181 lakhs for the period from 1 April 2019 to 30 September 2019, 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 is based solely on the report 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 matter.
 
7.   The Statement also includes the Group's share of net profit after tax of Rs. 224 lakhs and Rs. 454 lakhs for the quarter ended 30 September 2019 and for the period from 1 April 2019 to 30 September 2019, respectively, as considered in the unaudited consolidated financial results, in respect of two associates, based on their interim financial results which have neither been reviewed by their auditors nor by us. According to the information and explanations given to us by the Management, the interim financial results are not material to the Group.
  Our conclusion on these 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:19046768AAABMZ2756


ICAI UDIN:19044577AAAABC5588 




 


 




Mumbai


Mumbai




16 October 2019    


16 October 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 HALF YEAR ENDED SEPTEMBER 30, 2019




 


 


 


 


 


 


 


 (` in Lakhs)




Particulars


Quarter ended


Half year ended


Year ended




30.09.2019


30.06.2019


30.09.2018


30.09.2019


30.09.2018


31.03.2019




Unaudited


Unaudited


Unaudited


Unaudited


Unaudited


Audited




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


      3,25,425


      3,22,930


      2,76,492


         6,48,355


      5,43,230


       11,41,903




(a)


Interest/discount on advances/bills


      2,63,766


      2,60,608


      2,21,051


         5,24,374


      4,28,995


         9,08,962




(b)


Income on investments


         52,744


         55,523


         48,834


         1,08,267


         99,549


         2,03,745




(c)


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


           3,811


           1,972


           2,089


              5,783


           4,612


              7,347




(d)


Others


           5,104


           4,827


           4,518


              9,931


         10,074


            21,849




2. Other income


         42,092


         39,152


         32,289


            81,244


         59,375


         1,35,102




3. TOTAL INCOME (1+2)


    3,67,517


    3,62,082


    3,08,781


       7,29,599


    6,02,605


    12,77,005




4. Interest expended


      2,13,047


      2,07,513


      1,74,245


         4,20,560


      3,42,977


         7,24,268




5. Operating expenses (i)+(ii)


         82,590


         76,293


         64,776


         1,58,883


      1,29,576


         2,76,427




(i)


Employees cost


         44,070


         39,784


         30,893


            83,854


         65,395


         1,37,776




(ii)


Other operating expenses


         38,520


         36,509


         33,883


            75,029


         64,181


         1,38,651




6. TOTAL EXPENDITURE (4+5)

(excluding provisions and contingencies)


    2,95,637


    2,83,806


    2,39,021


       5,79,443


    4,72,553


    10,00,695




7. OPERATING PROFIT (3-6)

 (Profit before provisions and contingencies)


       71,880


       78,276


       69,760


       1,50,156


    1,30,052


       2,76,310




8. Provisions (other than tax) and contingencies


         25,177


         19,204


         28,882


            44,381


         48,797


            85,585




9. Exceptional items


 


                -  


                -  


                -  


                    -  


                 -  


                   -  




10. Profit from Ordinary Activities before tax

(7-8-9)


       46,703


       59,072


       40,878


       1,05,775


        81,255


       1,90,725




11. Tax expense


 


           5,033


         20,651


         14,274


            25,684


         28,380


            66,336




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


       41,670


       38,421


       26,604


          80,091


        52,875


       1,24,389




13. Extraordinary items (net of tax expense)


 


                -  


                -  


                -  


                    -  


                 -  


                   -  




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


 


       41,670


       38,421


       26,604


          80,091


        52,875


       1,24,389




15. Paid-up Equity Share Capital

(Face value ` 2/- per Equity Share)


         39,762


         39,720


         39,612


            39,762


         39,612


            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


           13.98


           14.10


           13.29


              13.98


           13.29


              14.14




(iii)


Earnings per Share (EPS) (in `)


 


 


 


 


 


 




 


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


2.10*


1.94*


1.34*


4.03*


2.67*


                6.28




 


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


2.08*


1.92*


1.33*


4.00*


2.65*


                6.24




(iv)


NPA Ratios


 


 


 


 


 


 




 


a) Gross NPA


      3,61,211


      3,39,469


      3,18,453


         3,61,211


      3,18,453


         3,26,068




 


b) Net NPA


      1,84,364


      1,67,282


      1,79,629


         1,84,364


      1,79,629


         1,62,620




 


c) % of Gross NPA


             3.07


             2.99


             3.11


                3.07


             3.11


                2.92




 


d) % of Net NPA


             1.59


             1.49


             1.78


                1.59


             1.78


                1.48




(v)


Return on Assets (%)


0.26*


0.24*


 0.19*


0.51*


 0.39*


                0.88




 


 


 


 


 


 


 


 




* Not Annualised
 
 


 


 


 


 


 


 




 
Segment Information@
 




Particulars


Quarter ended


Half year ended


Year ended




30.09.2019


30.06.2019


30.09.2018


30.09.2019


30.09.2018


31.03.2019




Unaudited


Unaudited


Unaudited


Unaudited


Unaudited


Audited




Segment Revenue:


 


 


 


 


 


 




 


Treasury


              68,830


                72,964


             61,715


          1,41,794


           1,24,011


             2,54,761




 


Corporate/Wholesale Banking


           1,38,806


             1,48,081


          1,18,582


          2,86,887


           2,31,381


             5,07,376




 


Retail Banking


           1,52,491


             1,35,331


          1,23,312


          2,87,822


           2,37,576


             4,88,342




 


Other Banking operations


                7,390


                  5,706


               5,172


             13,096


                9,637


                26,526




 


Unallocated


                      -  


                       -  


                     -  


                     -  


                      -  


                        -  




 


Total Revenue


         3,67,517


           3,62,082


        3,08,781


        7,29,599


         6,02,605


         12,77,005




 


Less: Inter Segment Revenue


                      -  


                       -  


                     -  


                     -  


                      -  


                        -  




 


Income from Operations


         3,67,517


           3,62,082


        3,08,781


        7,29,599


         6,02,605


         12,77,005




Segment Results (net of provisions):


 


 


 


 


 


 




 


Treasury


              12,259


                15,452


               3,468


             27,711


              13,264


                41,085




 


Corporate/Wholesale Banking


               (4,633)


                18,774


               4,999


             14,141


                6,913


                25,969




 


Retail Banking


              39,012


                26,319


             33,062


             65,331


              61,385


             1,20,186




 


Other Banking operations


                2,157


                   (927)


                  216


               1,230


                   966


                  6,690




 


Unallocated


               (2,092)


                   (546)


                (867)


             (2,638)


              (1,273)


                 (3,205)




 


Profit before tax


            46,703


              59,072


           40,878


        1,05,775


            81,255


           1,90,725




Segment Assets


 


 


 


 


 


 


 




 


Treasury


         34,09,896


           34,94,567


        31,18,628


        34,09,896


         31,18,628


           35,75,297




 


Corporate/Wholesale Banking


         59,08,518


           57,61,147


        58,56,115


        59,08,518


         58,56,115


           58,16,960




 


Retail Banking


         62,19,085


           59,11,252


        46,80,773


        62,19,085


         46,80,773


           56,68,073




 


Other Banking operations


                1,927


                     934


               1,965


               1,927


                1,965


                  1,138




 


Unallocated


         11,03,023


             8,65,911


          7,83,415


        11,03,023


           7,83,415


             8,72,531




 


Total


    1,66,42,449


     1,60,33,811


  1,44,40,896


  1,66,42,449


   1,44,40,896


      1,59,33,999




Segment Liabilities


 


 


 


 


 


 


 




 


Treasury


         32,85,495


           33,46,484


        30,05,316


        32,85,495


         30,05,316


           34,76,144




 


Corporate/Wholesale Banking


         57,97,969


           55,54,101


        56,26,533


        57,97,969


         56,26,533


           56,00,730




 


Retail Banking


         61,07,417


           57,02,225


        44,99,891


        61,07,417


         44,99,891


           54,61,130




 


Other Banking operations


                      -  


                         5


                     -  


                     -  


                      -  


                         4




 


Unallocated


              76,137


                64,833


             55,023


             76,137


              55,023


                68,687




 


Total


    1,52,67,018


     1,46,67,648


  1,31,86,763


  1,52,67,018


   1,31,86,763


      1,46,06,695




Capital employed:


 


 


 


 


 


 




(Segment Assets - Segment Liabilities)


 


 


 


 


 


 




 


Treasury


           1,24,401


             1,48,083


          1,13,312


          1,24,401


           1,13,312


                99,153




 


Corporate/Wholesale Banking


           1,10,549


             2,07,046


          2,29,582


          1,10,549


           2,29,582


             2,16,230




 


Retail Banking


           1,11,668


             2,09,027


          1,80,882


          1,11,668


           1,80,882


             2,06,943




 


Other Banking operations


                1,927


                     929


               1,965


               1,927


                1,965


                  1,134




 


Unallocated


         10,26,886


             8,01,078


          7,28,392


        10,26,886


           7,28,392


             8,03,844




 


Total


       13,75,431


        13,66,163


      12,54,133


      13,75,431


       12,54,133


         13,27,304




@


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 September 30, 2019 is given below:


 


 


 




 


 


 


 


 


(` in Lakhs)


 


 




 


Particulars


As at 30.09.2019


As at 30.09.2018


As at 31.03.2019


 


 




 


Unaudited


Unaudited


Audited


 


 




 


CAPITAL AND LIABILITIES


 


 


 


 


 




 


Capital


39,762


39,612


39,701


 


 




 


Reserves and Surplus


13,35,669


12,14,521


12,87,603


 


 




 


Deposits


1,39,54,652


1,18,18,242


1,34,95,434


 


 




 


Borrowings


7,76,384


8,87,349


7,78,132


 


 




 


Other Liabilities and Provisions


5,35,982


4,81,172


3,33,129


 


 




 


Total


1,66,42,449


1,44,40,896


1,59,33,999


 


 




 


ASSETS


 


 


 


 


 




 


Cash and Balances with Reserve Bank of India


7,73,319


5,71,829


6,41,917


 


 




 


Balance with Banks and Money at Call and Short Notice


3,67,442


2,42,941


3,64,763


 


 




 


Investments


31,09,436


28,21,385


31,82,447


 


 




 


Advances


1,15,89,321


1,00,94,088


1,10,22,295


 


 




 


Fixed assets


47,248


45,705


47,204


 


 




 


Other assets


7,55,683


6,64,948


6,75,373


 


 




 


Total


1,66,42,449


1,44,40,896


1,59,33,999


 


 




 


 


 


 


 


 


 


 




Notes:


 


 


 


 


 


 




1


The above Standalone Unaudited Financial Results for the quarter and half year ended September 30, 2019 were reviewed by the Audit Committee and approved by the Board of Directors at its meeting held on October 16, 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. The cash flow statement for the half year ended September 30, 2018 has been approved by the Bank's Board of Directors, but has not been subjected to review since the requirement of submission of Cash flow statement has become mandatory only from April 01, 2019.




 


 




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 half year ended September 30, 2019, the Bank has allotted 2,136,193 and 3,068,052 equity shares of ` 2 each, pursuant to the exercise of stock options by employees.




 


 


 


 


 


 


 


 




9


During the quarter ended June 30, 2019, the bank had raised ` 30,000.00 Lakhs Tier II capital by way of issuance of Basel III compliant Tier II Bonds.




 


 


 


 


 


 


 


 




10


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 the half year ended September 30, 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


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




October 16, 2019


 


 (DIN: 02274773)




 
 
 
 
 
 
 
 




THE FEDERAL BANK LIMITED




REGD.OFFICE: P.B.NO. 103, FEDERAL TOWERS, ALUVA-683101




(CIN: L65191KL1931PLC000368)




CASH FLOW STATEMENT FOR THE HALF YEAR ENDED SEPTEMBER 30, 2019




 


 


(` in Lakhs)




 


 Half year ended

 September 30, 2019


 Half year ended

 September 30, 2018




Cash Flow from Operating Activities


 


 




Net Profit before taxes


                   1,05,775


                         81,255




Adjustments for:


 


 




Depreciation on Bank's Property


                       5,835


                          6,203




Depreciation on Investments


                       2,603


                         12,737




Amortisation of Premium on Held to Maturity Investments


                       3,116


                          2,913




Provision for Non Performing Investments


                          188


                             759




Provision / Charge for Non Performing Assets


                      35,177


                         31,824




Provision for Standard Assets


                       6,178


                          3,450




(Profit)/Loss on sale of fixed assets (net)


                          (45)


                                9




Provision for Other Contingencies


                          235


                               27




 


                      1,59,062


                          1,39,177




Adjustments for working capital changes:-


 


 




(Increase)/ Decrease in Investments [excluding Held to Maturity Investments]


                    (21,727)


                      3,13,790




(Increase)/ Decrease in Advances


                  (6,02,202)


                     (9,30,165)




(Increase)/ Decrease in Other Assets


                    (65,540)


                       (69,315)




Increase/ (Decrease) in Deposits


                   4,59,218


                      6,18,993




Increase/ (Decrease) in Other liabilities and provisions


                   1,96,440


                      2,19,923




 


                       (33,811)


                          1,53,226




Direct taxes paid


                    (40,454)


                       (32,551)




Net Cash Flow from / (Used in) Operating Activities


                          84,797


                          2,59,852




 


 


 




Cash Flow from Investing Activities


 


 




Purchase of Fixed Assets


                      (6,010)


                         (6,241)




Proceeds from Sale of Fixed Assets


                          176


                               61




Investment in Subsidiary


                         (500)


                              -  




(Increase)/ Decrease in Held to Maturity Investments


                      89,331


                       (73,477)




Net Cash generated / (Used in) Investing Activities


                          82,997


                           (79,657)




 


 


 




Cash Flow from Financing Activities


 


 




Proceeds from Issue of Share Capital


                            61


                             169




Proceeds from Share Premium


                       1,342


                          3,457




Proceeds from Issue of Subordinate Debt


                      30,000


                              -  




Increase/(Decrease) in Borrowings (Excluding Subordinate Debt)


                    (31,749)


                     (2,66,001)




Dividend Paid (Including Tax on Dividend)


                    (33,541)


                       (23,871)




 


 


 




Net Cash generated from Financing Activities


                       (33,887)


                        (2,86,246)




 


 


 




Effect of exchange fluctuation on translation reserve


                          174


                             480




 


 


 




Net Increase in Cash and Cash Equivalents


                      1,34,081


                        (1,05,571)




 


 


 




Cash and Cash Equivalents at the beginning of period


                  10,06,680


                      9,20,341




Cash and Cash Equivalents at the end of period


                  11,40,761


                      8,14,770




 


 


 




Note:


 


 




Cash and Cash Equivalents comprise of Cash in hand (including foreign currency notes), Balances with Reserve Bank of India, Balances with banks and money at call and short notice.




 


 


 




 


 


 




 


 


 




Mumbai


SHYAM SRINIVASAN




October 16, 2019


MANAGING DIRECTOR & CEO




 


(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 HALF YEAR ENDED SEPTEMBER 30, 2019




 


 


 


 


 


 


 


 (` in Lakhs)




Particulars


Quarter ended


Half year ended


Year ended




30.09.2019


30.06.2019


30.09.2018


30.09.2019


30.09.2018


31.03.2019




Unaudited


Unaudited


Unaudited


Unaudited


Unaudited


Audited




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


      3,33,675


      3,29,521


      2,81,301


         6,63,196


      5,52,607


       11,63,544




(a)


Interest/discount on advances/bills


      2,72,087


      2,67,052


      2,25,776


         5,39,139


      4,38,265


         9,30,412




(b)


Income on investments


         52,674


         55,669


         48,917


         1,08,343


         99,656


         2,03,936




(c)


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


           3,810


           1,973


           2,090


              5,783


           4,612


              7,347




(d)


Others


           5,104


           4,827


           4,518


              9,931


         10,074


            21,849




2. Other income


         41,169


         37,097


         32,296


            78,266


         59,404


         1,33,522




3. TOTAL INCOME (1+2)


    3,74,844


    3,66,618


    3,13,597


       7,41,462


    6,12,011


    12,97,066




4. Interest expended


      2,15,422


      2,09,707


      1,76,117


         4,25,129


      3,46,636


         7,31,633




5. Operating expenses (i)+(ii)


         86,305


         79,077


         66,319


         1,65,382


      1,32,622


         2,83,658




(i)


Employees cost


         46,321


         41,541


         31,970


            87,862


         67,454


         1,42,566




(ii)


Other operating expenses


         39,984


         37,536


         34,349


            77,520


         65,168


         1,41,092




6. TOTAL EXPENDITURE (4+5)

(excluding provisions and contingencies)


    3,01,727


    2,88,784


    2,42,436


       5,90,511


    4,79,258


    10,15,291




7. OPERATING PROFIT (3-6)

 (Profit before provisions and contingencies)


       73,117


       77,834


       71,161


       1,50,951


    1,32,753


       2,81,775




8. Provisions (other than tax) and contingencies


         25,343


         19,332


         28,560


            44,675


         48,554


            85,765




9. Exceptional items


 


                -  


                -  


                -  


                    -  


                -  


                   -  




10. Profit from Ordinary Activities before tax

(7-8-9)


       47,774


       58,502


       42,601


       1,06,276


       84,199


       1,96,010




11. Tax expense


 


           5,334


         21,131


         14,670


            26,465


         29,143


            67,758




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


       42,440


       37,371


       27,931


           79,811


       55,056


       1,28,252




13. Extraordinary items (net of tax expense)


 


                -  


                -  


                -  


                    -  


                -  


                   -  




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


 


       42,440


       37,371


       27,931


           79,811


       55,056


       1,28,252




15. Minority interest


 


              129


              182


                -  


                 311


                -  


                 180




16. Share in Profit of Associates


 


              223


              231


              130


                 454


              300


              3,556




17. Consolidated Net Profit of the group

(14-15+16)


       42,534


       37,420


       28,061


           79,954


       55,356


       1,31,628




18. Paid-up Equity Share Capital

(Face value ` 2/- per Equity Share)


         39,762


         39,720


         39,612


            39,762


         39,612


            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


           14.32


           14.41


           13.43


              14.32


           13.43


              14.43




(iii)


Earnings per Share (EPS) (in `)


 


 


 


 


 


 




 


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


2.14*


1.88*


1.42*


4.03*


2.80*


                6.65




 


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


2.13*


1.87*


1.41*


3.99*


2.78*


                6.60




(iv)


NPA Ratios


 


 


 


 


 


 




 


a) Gross NPA


      3,65,317


      3,43,375


      3,20,299


         3,65,317


      3,20,299


         3,30,178




 


b) Net NPA


      1,87,941


      1,70,726


      1,81,217


         1,87,941


      1,81,217


         1,66,218




 


c) % of Gross NPA


             3.06


             2.98


             3.10


                3.06


             3.10


                2.92




 


d) % of Net NPA


             1.60


             1.50


             1.78


                1.60


             1.78


                1.49




(v)


Return on Assets (%)


0.26*


0.23*


 0.20*


0.49*


0.39*


                0.88




 


 


 


 


 


 


 


 




* Not Annualised


 


 


 


 


 


 




 
 




Particulars


Quarter ended


Half year ended


Year ended




30.09.2019


30.06.2019


30.09.2018


30.09.2019


30.09.2018


31.03.2019




Unaudited


Unaudited


Unaudited


Unaudited


Unaudited


Audited




Segment Revenue:


 


 


 


 


 


 




 


Treasury


            68,830


              70,881


                  61,715


             1,39,711


             1,24,011


         2,54,761




 


Corporate/Wholesale Banking


         1,38,806


           1,48,081


               1,18,582


             2,86,887


             2,31,381


         5,07,376




 


Retail Banking


         1,59,818


           1,41,950


               1,28,128


             3,01,768


             2,46,982


         5,08,403




 


Other Banking operations


              7,390


                5,706


                    5,172


                13,096


                  9,637


            26,526




 


Unallocated


                    -  


                      -  


                          -  


                       -  


                        -  


                    -  




 


Total Revenue


       3,74,844


         3,66,618


             3,13,597


           7,41,462


           6,12,011


     12,97,066




 


Less: Inter Segment Revenue


                    -  


                      -  


                          -  


                       -  


                        -  


                    -  




 


Income from Operations


       3,74,844


         3,66,618


             3,13,597


           7,41,462


           6,12,011


     12,97,066




Segment Results (net of provisions):


 


 


 


 


 


 




 


Treasury


            12,258


              13,338


                    3,874


                25,596


                13,670


            41,469




 


Corporate/Wholesale Banking


             (4,633)


              18,774


                    4,999


                14,141


                  6,913


            25,969




 


Retail Banking


            40,043


              27,845


                  34,379


                67,888


                63,923


         1,25,087




 


Other Banking operations


              2,198


                  (909)


                       216


                  1,289


                     966


              6,690




 


Unallocated


             (2,092)


                  (546)


                      (867)


                (2,638)


                 (1,273)


             (3,205)




 


Profit before tax


           47,774


             58,502


                 42,601


           1,06,276


              84,199


       1,96,010




Segment Assets


 


 


 


 


 


 


 




 


Treasury


       34,11,608


         34,96,055


             31,18,765


           34,11,608


           31,18,765


       35,78,232




 


Corporate/Wholesale Banking


       59,08,518


         57,61,147


             58,56,115


           59,08,518


           58,56,115


       58,16,960




 


Retail Banking


       63,86,249


         60,33,252


             47,81,410


           63,86,249


           47,81,410


       57,86,386




 


Other Banking operations


              1,057


                   725


                    1,965


                  1,057


                  1,965


              1,138




 


Unallocated


       11,03,023


           8,65,911


               7,83,415


           11,03,023


             7,83,415


         8,72,531




 


Total


  1,68,10,455


    1,61,57,090


        1,45,41,670


     1,68,10,455


      1,45,41,670


  1,60,55,247




Segment Liabilities


 


 


 


 


 


 


 




 


Treasury


       32,85,495


         33,46,484


             30,05,316


           32,85,495


           30,05,316


       34,76,144




 


Corporate/Wholesale Banking


       57,97,969


         55,54,101


             56,26,532


           57,97,969


           56,26,532


       56,00,730




 


Retail Banking


       62,33,582


         57,95,756


             45,91,627


           62,33,582


           45,91,627


       55,51,810




 


Other Banking operations


                    -  


                       5


                          -  


                       -  


                        -  


                     4




 


Unallocated


            76,137


              64,833


                  55,023


                76,137


                55,023


            68,687




 


Total


  1,53,93,183


    1,47,61,179


        1,32,78,498


     1,53,93,183


      1,32,78,498


  1,46,97,375




Capital employed:


 


 


 


 


 


 




(Segment Assets - Segment Liabilities)


 


 


 


 


 


 




 


Treasury


         1,26,113


           1,49,571


               1,13,449


             1,26,113


             1,13,449


         1,02,088




 


Corporate/Wholesale Banking


         1,10,549


           2,07,046


               2,29,583


             1,10,549


             2,29,583


         2,16,230




 


Retail Banking


         1,52,667


           2,37,496


               1,89,783


             1,52,667


             1,89,783


         2,34,576




 


Other Banking operations


              1,057


                   720


                    1,965


                  1,057


                  1,965


              1,134




 


Unallocated


       10,26,886


           8,01,078


               7,28,392


           10,26,886


             7,28,392


         8,03,844




 


Total


     14,17,272


       13,95,911


           12,63,172


        14,17,272


         12,63,172


     13,57,872




@


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 Group as on September 30, 2019 is given below:


 


 


 




 


 


 


 


 


(` in Lakhs)


 


 




 


Particulars


As at 30.09.2019


As at 30.09.2018


As at 31.03.2019


 


 




 


Unaudited


Unaudited


Audited


 


 




 


CAPITAL AND LIABILITIES


 


 


 


 


 




 


Capital


39,762


39,612


39,701


 


 




 


Reserves and Surplus


13,62,141


12,23,560


13,10,125


 


 




 


Minority Interest


15,369


                          -  


8,046


 


 




 


Deposits


1,39,52,139


1,18,18,241


1,34,87,893


 


 




 


Borrowings


8,93,823


9,74,545


8,70,629


 


 




 


Other Liabilities and Provisions


5,47,221


4,85,712


3,38,853


 


 




 


Total


1,68,10,455


1,45,41,670


1,60,55,247


 


 




 


ASSETS


 


 


 


 


 




 


Cash and Balances with Reserve Bank of India


7,74,158


5,72,084


6,42,267


 


 




 


Balance with Banks and Money at Call and Short Notice


3,73,480


2,43,385


3,63,080


 


 




 


Investments


30,96,818


28,04,023


31,67,570


 


 




 


Advances


1,17,54,542


1,02,06,755


1,11,53,592


 


 




 


Fixed assets


48,809


46,079


47,993


 


 




 


Other assets


7,62,648


6,69,344


6,80,745


 


 




 


Total


1,68,10,455


1,45,41,670


1,60,55,247


 


 




 


 


 


 


 


 


 


 




Notes:


 


 


 


 


 


 




1


The above Consolidated Financial Results for the quarter and half year ended September 30, 2019 were reviewed by the Audit Committee and subsequently taken on record and approved by the Board of Directors at its meeting held on October 16, 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. The figures for the quarter and half year ended September 30, 2018 and the cash flow statement for the half year ended September 30, 2018 have been approved by the Bank's Board of Directors, but have not been subjected to review since the requirement of submission of quarterly consolidated financial results and cash flow statement 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 half year ended September 30, 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 half year ended September 30, 2019, the Bank has allotted 2,136,193 and 3,068,052 equity shares of ` 2 each, pursuant to the exercise of stock options by employees.




 


 


 


 


 


 


 


 




10


During the quarter ended June 30, 2019, the bank had raised ` 30,000.00 Lakhs Tier II capital by way of issuance of Basel III compliant Tier II Bonds.




 


 


 


 


 


 


 


 




11


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 the half year ended September 30, 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.




 


 


 


 


 


 


 


 




12


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.




 


 


 


 


 


 


 


 




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




October 16, 2019


 


 (DIN: 02274773)




 
 
 
 
 




THE FEDERAL BANK LIMITED




REGD.OFFICE: P.B.NO. 103, FEDERAL TOWERS, ALUVA-683101




(CIN: L65191KL1931PLC000368)




CONSOLIDATED CASH FLOW STATEMENT FOR THE HALF YEAR ENDED SEPTEMBER 30, 2019




 


(` in Lakhs)




 


 Half year ended

 September 30, 2019


 Half year ended

 September 30, 2018




Cash Flow from Operating Activities


 


 




Net Profit before taxes


                   1,06,420


                      84,499




Adjustments for:


                           -  


                           -  




Depreciation on Group's Property


                       6,039


                       6,268




Depreciation on Investments


                       2,634


                      12,331




Amortisation of Premium on Held to Maturity Investments


                       3,116


                       2,913




Provision for Non Performing Investments


                          188


                          759




Provision / Charge for Non Performing Assets


                      35,194


                      31,910




Provision for Standard Assets


                       6,423


                       3,527




(Profit)/ Loss on sale of fixed assets (net)


                          (47)


                             9




(Income) / Loss From Associate


                        (454)


                         (300)




Provision for Other Contingencies


                          235


                            27




 


                      1,59,748


                      1,41,943




Adjustments for working capital changes:-


 


 




(Increase)/ Decrease in Investments [excluding Held to Maturity Investments]


                    (23,563)


                   3,13,218




(Increase)/ Decrease in Advances


                  (6,36,145)


                  (9,37,577)




(Increase)/ Decrease in Other Assets


                    (66,781)


                    (69,731)




Increase/ (Decrease) in Deposits


                   4,64,246


                   6,21,231




Increase/ (Decrease) in Other liabilities and provisions


                   2,01,710


                   2,18,109




 


                       (60,533)


                      1,45,250




Direct taxes paid


                    (41,587)


                    (33,601)




Net Cash Flow from / (Used in) Operating Activities


                          57,628


                      2,53,592




 


 


 




Cash Flow from Investing Activities


 


 




Purchase of Fixed Assets


                      (6,987)


                      (6,282)




Proceeds from Sale of Fixed Assets


                          179


                            61




Investment in Subsidiary


                        (500)


                           -  




(Increase)/ Decrease in Held to Maturity Investments


                      89,331


                    (73,477)




Net Cash generated / (Used in) Investing Activities


                          82,023


                       (79,698)




 


 


 




Cash Flow from Financing Activities


 


 




Proceeds from Issue of Share Capital


                           61


                          169




Proceeds from Share Premium


                       6,497


                       3,457




Increase / (Decrease) in Minority Interest


                       6,255


                           -  




Proceeds from Issue of Subordinate Debt


                      30,000


                           -  




Increase/(Decrease) in Borrowings (Excluding Subordinate Debt)


                      (6,806)


                  (2,58,181)




Dividend Paid (Including Tax on Dividend)


                    (33,541)


                    (23,871)




 


 


 




Net Cash generated  from financing Activities


                            2,466


                    (2,78,426)




 


 


 




Effect of exchange fluctuation on translation reserve


                          174


                          480




 


 


 




Increase/(Decrease) in Cash and Cash Equivalents


                      1,42,291


                    (1,04,052)




 


 


 




Cash and Cash Equivalents at the beginning of year


                 10,05,347


                   9,19,521




Cash and Cash Equivalents at the end of year


                 11,47,638


                   8,15,469




 


 


 




Note:


 


 




Cash and Cash Equivalents comprise of Cash in hand (including foreign currency notes), Balances with Reserve Bank of India, Balances with banks and money at call and short notice




 


 


 




 


 


 




 


 


 




Mumbai


SHYAM SRINIVASAN




October 16, 2019


MANAGING DIRECTOR & CEO




 


(DIN: 02274773)




 




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