RNS Number : 0476W
Federal Bank Ltd (The)
04 February 2017
 

 

 

 

 

 

 

SDF-24/         /2016-17                                                                    04th February 2017

 

                                                            

 

To,

The London Stock Exchange

 

 

 

Dear Sir,

We enclose herewith the Un-Audited Financial Results of the Bank for the period ended December 31, 2016 which was approved at the Bank's Board of Directors meeting held on 19th January 2017.

 

Kindly take the same on your record.

 

For The Federal Bank Limited

 

 

 

 

Girish Kumar G

COMPANY SECRETARY

 

 

 

 

BSR&Co. LLP

M.M. Nissim & Co.

Chartered Accountants

Chartered Accountants

5th Floor, Lodha Excelus

Barodawala Mansion, B-Wing,

Apollo Mills Compound

3rd Floor, 81,

N.M. Joshi Marg, Mahalaxmi

Dr. Annie Besant Road,

Mumbai- 400 011

Worli, Mumbai- 400 018

 

Limited Review Report on Quarterly Standalone Financial Results of The Federal Bank Limited pursuant to the Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015

 

To the Board of Directors of

The Federal Bank Limited

1.   We have reviewed the accompanying Statement of Unaudited Standalone Financial Results ('the Statement') of The Federal Bank Limited ('the Bank') for the quarter and nine months ended 31 December 2016, attached herewith, being submitted by the Bank pursuant to the requirement of Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, except for the disclosures relating to 'consolidated Pillar 3 disclosure as at 31 December 2016, including leverage ratio and liquidity coverage ratio under Basel III Capital Regulations' as have been disclosed on the Bank's website and in respect of which a link has been provided in the standalone quarterly financial results and have not been reviewed by us.

2.   This Statement is the responsibility of the Bank's management and has been approved by the Board of Directors of the Bank in their meeting held on 19 January 2017. Our responsibility is to issue a report on the Statement based on our review. The financial results for all periods prior to the quarter ended 30 September 2016, included in the statement were reviewed or audited earlier by Deloitte Haskins & Sells, Chartered Accountants, and by M P Chitale& Co., Chartered Accountants, the then joint statutory auditors of the Bank, whose reports have been furnished to the current joint auditors M.M. Nissim & Co., Chartered Accountants, and B S R & Co. LLP, and which have been relied upon for the purpose of the joint review of the Statement. 

3.   We conducted our review in accordance with the Standard on Review Engagement (SRE) 2410,"Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Institute of Chartered Accountants of India.  This standard requires that we plan and perform the review to obtain moderate assurance as to whether the Statement is free of material misstatement.  A review is limited primarily to inquiries of the Bank's personnel and analytical procedures applied to financial data and thus provides less assurance than an audit.  We have not performed an audit and accordingly, we do not express an audit opinion.

4.   The Financial results incorporate the relevant returns of 100 Branches and Treasury Branch reviewed by either of us and un-reviewed returns in respect of 1177 branches. These Branches cover 57.68% of the advances portfolio (excluding outstanding of asset recovery branches and food credit advance) of the Bank and 60.68% of non-performing advances of the bank.

5.   Without qualifying our conclusion, we draw attention to Note No. 6 regarding deferment of shortfall arising from the sale of certain non-performing assets during the year ended 31 March 2016 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 and the unamortized balance as at 31 December 2016 of Rs. 2,168.29 lakhs.

6.   Based on our review conducted as mentioned in paragraphs 3and 4 above, nothing has come to our attention that causes us to believe that the accompanying Statement prepared in accordance with applicable accounting standards specified under section 133 of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014 and other recognized accounting practices and policies has not disclosed the information required to be disclosed in terms of Regulation 33 of the 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.

 

 

 


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, 2016








 (` in Lakhs)

Particulars

Quarter ended

Nine Months ended

Year ended 31.03.2016

31.12.2016

30.09.2016

31.12.2015

31.12.2016

31.12.2015

Unaudited

Unaudited

Unaudited

Unaudited

Unaudited

Audited

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

      2,28,142

     2,06,625

     1,90,325

      6,36,144

     5,72,149

     7,74,815

(a)

Interest/discount on advances/bills

      1,71,622

     1,56,880

     1,38,554

      4,80,924

     4,19,982

     5,66,931

(b)

Income on Investments

         45,122

        43,552

        44,638

      1,31,758

     1,30,314

     1,76,309

(c)

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

           3,494

          1,585

          1,657

           6,295

          4,871

          5,596

(d)

Others

           7,904

          4,608

          5,476

         17,167

        16,982

        25,979

2. Other Income

         26,333

        26,154

        18,282

         76,191

        55,620

        78,292

3. TOTAL INCOME (1+2)

    2,54,475

   2,32,779

   2,08,607

    7,12,335

   6,27,769

   8,53,107

4. Interest expended

      1,49,003

     1,34,006

     1,29,756

      4,15,119

     3,89,987

     5,24,045

5. Operating Expenses (i)+(ii)

         57,982

        51,280

        46,303

      1,59,647

     1,34,856

     1,86,684

(i)

Employees Cost

         31,972

        29,159

        25,859

         90,072

        75,981

     1,05,285

(ii)

Other operating expenses

         26,010

        22,121

        20,444

         69,575

        58,875

        81,399

6. TOTAL EXPENDITURE (4+5)
(excluding Provisions and Contingencies)

    2,06,985

   1,85,286

   1,76,059

    5,74,766

   5,24,843

   7,10,729

7. OPERATING PROFIT (3-6)
 (Profit before Provisions and Contingencies)

       47,490

       47,493

      32,548

    1,37,569

   1,02,926

   1,42,378

8. Provisions (other than Tax) and Contingencies

         15,882

        16,840

          7,511

         49,570

        31,549

        70,413

9. Exceptional Items


                -  

                -  

                -  

                 -  

                -  

                -  

10. Profit from Ordinary Activities before tax (7-8-9)

       31,608

       30,653

      25,037

       87,999

      71,377

      71,965

11. Tax expense


         11,043

        10,529

          8,765

         30,579

        24,838

        24,400

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

       20,565

       20,124

      16,272

       57,420

      46,539

      47,565

13. Extraordinary items (net of tax expense)


                -  

                -  

                -  

                 -  

                -  

                -  

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


       20,565

       20,124

      16,272

       57,420

      46,539

      47,565

15. Paid-up Equity Share Capital
(Face value ` 2/- per Equity Share)

         34,443

        34,410

        34,367

         34,443

        34,367

        34,379

16. Reserves excluding Revaluation Reserve






     7,74,242

17. Analytical Ratios








(i)

Percentage of shares held by Government of India

NIL

NIL

NIL

NIL

NIL

NIL

(ii)

Capital Adequacy ratio (%)








Under Basel III

           12.28

          12.85

          14.32

           12.28

          14.32

          13.93

(iii)

Earnings per Share (EPS) (in `)








(a) Basic EPS  (before and after Extra ordinary Items)

1.20*

1.17*

0.95*

3.34*

2.71*

2.77


(b) Diluted EPS (before and after Extra ordinary Items)

1.18*

1.15*

0.94*

3.29*

2.68*

2.75

(iv)

NPA Ratios








a) Gross NPA

      1,95,155

     1,81,972

     1,68,411

      1,95,155

     1,68,411

     1,66,777


b) Net NPA

      1,10,237

     1,03,974

        87,610

      1,10,237

        87,610

        95,001


c) % of Gross NPA

             2.77

            2.78

            3.15

             2.77

            3.15

            2.84


d) % of Net NPA

             1.58

            1.61

            1.66

             1.58

            1.66

            1.64

(v)

Return on Assets (%)

 0.2 *

0.22*

 0.19*

 0.6*

 0.56*

            0.57









* Not Annualised







Segment Information@














 (` in Lakhs)

 

Particulars

Quarter ended

Nine Months ended

Year ended 31.03.2016

 

31.12.2016

30.09.2016

31.12.2015

31.12.2016

31.12.2015

 

Unaudited

Unaudited

Unaudited

Unaudited

Unaudited

Audited

 

Segment Revenue:







 


Treasury

             65,168

            61,233

         55,321

          1,85,968

      1,69,001

         2,28,193

 


Corporate/Wholesale Banking

             75,059

            69,657

         56,861

          2,16,606

      1,68,392

         2,36,094

 


Retail Banking

          1,10,117

         1,00,740

         95,416

          3,02,978

      2,88,176

         3,80,964

 


Other Banking operations

               4,131

              1,149

           1,009

               6,783

           2,200

              7,856

 


Unallocated

                     -  

                    -  

                 -  

                     -  

                 -  

                    -  

 


Total Revenue

        2,54,475

       2,32,779

    2,08,607

        7,12,335

    6,27,769

       8,53,107

 


Less: Inter Segment Revenue

                     -  

                    -  

                 -  

                     -  

                 -  

                    -  

 


Income from Operations

        2,54,475

       2,32,779

    2,08,607

        7,12,335

    6,27,769

       8,53,107

 

Segment Results (net of provisions):







 


Treasury

               8,779

            10,954

           2,721

             32,558

         12,679

            15,852

 


Corporate/Wholesale Banking

               2,249

              2,012

           2,936

               7,597

           7,138

              1,814

 


Retail Banking

             19,035

            17,533

         19,280

             45,588

         51,521

            49,459

 


Other Banking operations

               2,386

              1,016

              914

               4,347

           1,854

              7,385

 


Unallocated

                (841)

                (862)

             (814)

             (2,091)

          (1,815)

            (2,545)

 


Profit before tax

           31,608

          30,653

        25,037

           87,999

        71,377

          71,965

 

Segment Assets








 


Treasury

        38,13,929

       32,64,602

    32,72,465

        38,13,929

    32,72,465

       33,34,198

 


Corporate/Wholesale Banking

        34,00,648

       28,94,267

    21,43,600

        34,00,648

    21,43,600

       24,83,667

 


Retail Banking

        36,45,243

       36,24,006

    31,84,203

        36,45,243

    31,84,203

       33,71,086

 


Other Banking operations

               4,398

                 539

           7,070

               4,398

           7,070

              2,656

 


Unallocated

          2,85,520

         2,64,176

      2,67,501

          2,85,520

      2,67,501

         2,45,196

 


Total

  1,11,49,738

  1,00,47,590

  88,74,839

  1,11,49,738

  88,74,839

     94,36,803

 

Segment Liabilities








 


Treasury

        35,10,701

       29,69,932

    29,30,621

        35,10,701

    29,30,621

       30,67,275

 


Corporate/Wholesale Banking

        32,59,778

       27,45,722

    20,43,520

        32,59,778

    20,43,520

       23,37,684

 


Retail Banking

        35,00,018

       34,43,998

    30,40,948

        35,00,018

    30,40,948

       31,78,818

 


Other Banking operations

                     -  

                    -  

                 -  

                     -  

                 -  

                    -  

 


Unallocated

             11,396

            41,358

         37,383

             11,396

         37,383

            43,904

 


Total

  1,02,81,893

     92,01,010

  80,52,472

  1,02,81,893

  80,52,472

     86,27,681

 

Capital employed:







 

(Segment Assets - Segment Liabilities)







 


Treasury

          3,03,228

         2,94,670

      3,41,844

          3,03,228

      3,41,844

         2,66,923

 


Corporate/Wholesale Banking

          1,40,870

         1,48,545

      1,00,080

          1,40,870

      1,00,080

         1,45,983

 


Retail Banking

          1,45,225

         1,80,008

      1,43,255

          1,45,225

      1,43,255

         1,92,268

 


Other Banking operations

               4,398

                 539

           7,070

               4,398

           7,070

              2,656

 


Unallocated

          2,74,124

         2,22,818

      2,30,118

          2,74,124

      2,30,118

         2,01,292

 


Total

        8,67,845

       8,46,580

    8,22,367

        8,67,845

    8,22,367

       8,09,122

 

@

For the above segment reporting, the reportable segments are identified into Treasury, Corporate/Wholesale Banking, Retail Banking and Other Banking Operations in compliance with the  RBI guidelines.

 

Notes:







 

1

The above Standalone Unaudited Financial Results for the quarter ended December 31, 2016 were reviewed by the Audit Committee and approved by the Board of Directors at its meeting held on January 19, 2017. These Results have been subjected to "Limited Review" by the Statutory Central Auditors of the Bank and an unmodified review report has been issued.

 

 

2

The Bank has made provision for Non Performing Assets as stipulated under Reserve Bank of India (RBI) norms. Further, provision for standard assets including requirements for exposures to entities with Unhedged Foreign Currency Exposures and provision for restructured advances have been made as per RBI guidelines.

 

3

The Bank has followed the same significant accounting policies in the preparation of the interim financial statements as those followed in the annual financial statements for the year ended March 31, 2016.

 

4

In accordance with RBI Circular  DBR.No.BP.BC.1/21.06.201/2015-16 on Basel III Capital Regulations dated July 01, 2015 and RBI Circular DBR.No.BP.BC.80/21.06.201/2014-15 dated March 31, 2015  - 'Prudential Guidelines on Capital Adequacy and Liquidity Standards - amendments', Banks are required to make Pillar 3 disclosure requirements including Leverage Ratio disclosure requirements that are to be made along with the publication of Financial Results. Accordingly, such applicable disclosures have been placed on the website of the Bank which can be accessed at the following link: http://www.federalbank.co.in/regulatory-disclosures. These disclosures have not been subjected to review by the Statutory Central Auditors of the Bank.

 

5

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.

 

6

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 ` 6,504.87 Lakhs for the Quarter and nine months ended December 31,2016 respectively and the unamortised balance carried forward as on December 31,2016 is ` 2,168.29 Lakhs, to be amortised in the next quarter.

 

7

During the quarter and nine months ended December 31,2016, the Bank allotted 16,60,996 and 31,95,761 Equity Shares respectively, pursuant to the exercise of stock options by certain employees.

 

8

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 / Nine months ended December 31, 2016 or the previous periods/year.

 

9

The figures for the quarter and nine months ended December 31,2015 and year ended March 31,2016 were reviewed / audited by previous statutory auditors.

 

10

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

 









 









 









 









 









 









 









 









 




 SHYAM SRINIVASAN

 

Mumbai


 MANAGING DIRECTOR & CEO

 

January 19, 2017


 (DIN: 02274773)

 

 

 

 

                                                                                                   


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