RNS Number : 2316E
Federal Bank Ltd (The)
16 October 2018
 

 

 

 

SDF-24/         /2018-19                                                                      16TH October 2018

 

To,

The London Stock Exchange

 

 

Dear Sir,

We enclose herewith the Un-Audited Financial Results of the Bank for the period ended September 30, 2018 which was approved at the Bank's Board of Directors meeting held on 16th October 2018.

 

Kindly take the same on your record.

 

For The Federal Bank Limited

 

 

 

 

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 results of The Federal Bank Limited pursuant to the Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015

 

To the Board of Directors of

The Federal Bank Limited

1.   We have reviewed the accompanying Statement of Unaudited Standalone Financial Results of
The Federal Bank Limited ('the Bank') for the quarter ended 30 September 2018 and year to date results for the period from 1 April 2018 to 30 September 2018 ('the Statement'), attached herewith, being submitted by the Bank pursuant to the requirement of Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 ('Listing Regulations'), except for the disclosures relating to consolidated Pillar 3 disclosure as at 30 September 2018, including leverage ratio and liquidity coverage ratio under Basel III Capital Regulations as have been disclosed on the Bank's website and in respect of which a link has been provided in the Statement and have not been reviewed by us.

2.   This Statement is the responsibility of the Bank's management and has been approved by the Board of Directors of the Bank in their meeting held on 16 October 2018. Our responsibility is to issue a report on the Statement based on our review.

3.   We conducted our review in accordance with the Standard on Review Engagement (SRE) 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" specified under section 143(10) of the Companies Act, 2013.  This standard requires that we plan and perform the review to obtain moderate assurance as to whether the Statement is free of material misstatement.  A review is limited primarily to inquiries of the Bank's personnel and analytical procedures applied to financial data and thus provides less assurance than an audit. We have not performed an audit and accordingly, we do not express an audit opinion.

4.   The financial results incorporate the relevant returns of 114 Branches and Treasury Branch reviewed by either of us and un-reviewed returns in respect of 1,138 branches. These Branches cover 59.53% of the advances portfolio (excluding outstanding of asset recovery branches and food credit advance) of the Bank and 63.46% of non-performing advances of the bank.

5.   Without qualifying our conclusion, we draw attention to Note No. 8 regarding exercise of the option by the Bank by spreading the provision for Mark to Market (MTM) losses over four quarters resulting into carrying forward of un-amortised MTM losses of ₹ 2,946.99 Lakhs as at 30 September 2018 for amortisation in remaining quarters.

 

  

 

Limited review report on unaudited quarterly standalone financial results and standalone year to date results of The Federal Bank Limited pursuant to the Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (continued)

 

6.   Based on our review conducted as mentioned in paragraphs 3 and 4 above, nothing has come to our attention that causes us to believe that the accompanying Statement prepared in accordance with applicable accounting standards specified under Section 133 of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014 and other recognized accounting practices and policies has not disclosed the information required to be disclosed in terms of Regulation 33 of the Listing Regulations including the manner in which it is to be disclosed, or that it contains any material misstatement or that it has not been prepared in accordance with the relevant prudential norms issued by the Reserve Bank of India in respect of income recognition, asset classification, provisioning and other related matters

 

 

 

 

 

 

For B S R & Co. LLP

For M.M. Nissim & Co.

Chartered Accountants

Chartered Accountants

Firm's Registration No: 101248W / W-100022

Firm's Registration No: 107122W

 

 

 

 

 

 

 

 

Akeel Master

Sanjay Khemani

Partner

Partner

Membership No: 046768

Membership No: 044577

Mumbai

Mumbai

16 October 2018                                                                             

16 October 2018

 

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, 2018

 

 

 

 

 

 

 

 (` in Lakhs)

Particulars

Quarter ended

Half year ended

Year ended 31.03.2018

30.09.2018

30.06.2018

30.09.2017

30.09.2018

30.09.2017

Unaudited

Unaudited

Unaudited

Unaudited

Unaudited

Audited

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

       276,492

       266,738

       237,960

543,230

           470,369

          975,286

(a)

Interest/discount on advances/bills

       221,051

       207,944

       185,900

428,995

           364,675

          753,878

(b)

Income on investments

         48,834

         50,715

         45,000

99,549

             91,829

          191,744

(c)

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

           2,089

           2,523

           2,586

4,612

               4,953

              9,581

(d)

Others

           4,518

           5,556

           4,474

10,074

               8,912

            20,083

2. Other income

         32,289

         27,086

         28,722

59,375

             61,632

          115,912

3. TOTAL INCOME (1+2)

     308,781

     293,824

     266,682

602,605

         532,001

    1,091,198

4. Interest expended

       174,245

       168,732

       148,069

342,977

           300,411

          617,005

5. Operating expenses (i)+(ii)

         64,776

         64,800

         60,292

129,576

           117,484

          245,090

(i)

Employees cost

         30,893

         34,502

         31,274

65,395

             61,119

          124,247

(ii)

Other operating expenses

         33,883

         30,298

         29,018

64,181

             56,365

          120,843

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

     239,021

     233,532

     208,361

472,553

         417,895

        862,095

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

       69,760

       60,292

       58,321

130,052

         114,106

        229,103

8. Provisions (other than tax) and contingencies

         28,882

         19,915

         17,677

48,797

             41,321

            94,717

9. Exceptional items

 

                -  

                -  

                -  

                -  

                     -  

                   -  

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

       40,878

       40,377

       40,644

81,255

           72,785

        134,386

11. Tax expense

 

         14,274

         14,106

         14,274

28,380

             25,400

            46,501

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

       26,604

       26,271

       26,370

52,875

           47,385

          87,885

13. Extraordinary items (net of tax expense)

 

                -  

                -  

                -  

                -  

                     -  

                   -  

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

 

       26,604

       26,271

       26,370

52,875

           47,385

          87,885

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

         39,612

         39,552

         39,091

39,612

             39,091

            39,443

16. Reserves excluding Revaluation Reserve

 

 

 

 

 

       1,181,080

17. Analytical Ratios

 

 

 

 

 

 

 

(i)

Percentage of shares held by Government of India

NIL

NIL

NIL

NIL

NIL

NIL

(ii)

Capital Adequacy ratio (%)

 

 

 

 

 

 

 

Under Basel III

           13.29

           14.50

           14.63

13.29

               14.63

              14.70

(iii)

Earnings per Share (EPS) (in `)

 

 

 

 

 

 

 

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

1.34*

1.33*

1.35*

2.67*

2.58*

4.62

 

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

1.33*

1.32*

1.33*

2.65*

2.53*

4.56

(iv)

NPA Ratios

 

 

 

 

 

 

 

a) Gross NPA

       318,453

       286,882

       194,897

318,453

           194,897

          279,562

 

b) Net NPA

       179,629

       162,022

       106,638

179,629

           106,638

          155,196

 

c) % of Gross NPA

             3.11

             3.00

             2.39

3.11

                 2.39

                3.00

 

d) % of Net NPA

             1.78

             1.72

             1.32

1.78

                 1.32

                1.69

(v)

Return on Assets (%)

0.19*

0.20*

 0.24 *

0.39*

 0.43 *

                0.75

 

 

 

 

 

 

 

 

* Not Annualised

 

 

 

 

 

 

Segment Information@

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 (` in Lakhs)

 

Particulars

Quarter ended

Half year ended

Year ended 31.03.2018

 

30.09.2018

30.06.2018

30.09.2017

30.09.2018

30.09.2017

 

Unaudited

Unaudited

Unaudited

Unaudited

Unaudited

Audited

 

Segment Revenue:

 

 

 

 

 

 

 

 

Treasury

             61,715

                  62,296

                  58,686

                124,011

            122,462

           239,556

 

 

Corporate/Wholesale Banking

           118,582

                112,799

                  94,157

                231,381

            184,798

           378,695

 

 

Retail Banking

           123,312

                114,264

                109,591

                237,576

            216,569

           454,386

 

 

Other Banking operations

               5,172

                    4,465

                    4,248

                    9,637

                8,172

             18,561

 

 

Unallocated

                     -  

                          -  

                          -  

                          -  

                      -  

                    -  

 

 

Total Revenue

         308,781

              293,824

              266,682

              602,605

          532,001

     1,091,198

 

 

Less: Inter Segment Revenue

                     -  

                          -  

                          -  

                          -  

                      -  

                    -  

 

 

Income from Operations

         308,781

              293,824

              266,682

              602,605

          532,001

     1,091,198

 

Segment Results (net of provisions):

 

 

 

 

 

 

 

 

Treasury

               3,468

                    9,796

                  10,902

                  13,264

              23,642

             25,650

 

 

Corporate/Wholesale Banking

               4,999

                    1,914

                    6,405

                    6,913

                4,583

           (13,797)

 

 

Retail Banking

             33,062

                  28,323

                  22,789

                  61,385

              43,614

           120,093

 

 

Other Banking operations

                  216

                       750

                    1,047

                       966

                1,937

               5,251

 

 

Unallocated

                 (867)

                      (406)

                      (499)

                   (1,273)

                 (991)

             (2,811)

 

 

Profit before tax

            40,878

                 40,377

                 40,644

                 81,255

            72,785

         134,386

 

Segment Assets

 

 

 

 

 

 

 

 

 

Treasury

        3,118,628

             3,145,414

             3,050,768

             3,118,628

         3,050,768

        3,510,841

 

 

Corporate/Wholesale Banking

        5,856,115

             5,249,962

             4,580,074

             5,856,115

         4,580,074

        5,072,766

 

 

Retail Banking

        4,680,773

             4,593,053

             3,879,775

             4,680,773

         3,879,775

        4,539,627

 

 

Other Banking operations

               1,965

                    1,184

                    1,806

                    1,965

                1,806

                  533

 

 

Unallocated

           783,415

                678,484

                663,369

                783,415

            663,369

           707,628

 

 

Total

    14,440,896

         13,668,097

         12,175,792

         14,440,896

    12,175,792

   13,831,395

 

Segment Liabilities

 

 

 

 

 

 

 

 

 

Treasury

        3,005,316

             2,981,393

             2,860,293

             3,005,316

         2,860,293

        3,348,514

 

 

Corporate/Wholesale Banking

        5,626,533

             5,005,327

             4,379,950

             5,626,533

         4,379,950

        4,849,217

 

 

Retail Banking

        4,499,891

             4,380,781

             3,708,703

             4,499,891

         3,708,703

        4,341,585

 

 

Other Banking operations

                     -  

                           4

                          -  

                          -  

                      -  

                      1

 

 

Unallocated

             55,023

                  50,716

                  53,523

                  55,023

              53,523

             71,055

 

 

Total

    13,186,763

         12,418,221

         11,002,469

         13,186,763

    11,002,469

   12,610,372

 

Capital employed:

 

 

 

 

 

 

 

(Segment Assets - Segment Liabilities)

 

 

 

 

 

 

 

 

Treasury

           113,312

                164,021

                190,475

                113,312

            190,475

           162,327

 

 

Corporate/Wholesale Banking

           229,582

                244,635

                200,124

                229,582

            200,124

           223,549

 

 

Retail Banking

           180,882

                212,272

                171,072

                180,882

            171,072

           198,042

 

 

Other Banking operations

               1,965

                    1,180

                    1,806

                    1,965

                1,806

                  532

 

 

Unallocated

           728,392

                627,768

                609,846

                728,392

            609,846

           636,573

 

 

Total

      1,254,133

           1,249,876

           1,173,323

           1,254,133

       1,173,323

     1,221,023

 

@

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

 

 

Statement of Assets and Liabilities of the bank as on September 30, 2018 is given below:

 

 

 

 

 

 

 

 

 

(` in Lakhs)

 

 

 

 

Particulars

As at 30.09.2018

As at 30.09.2017

As at 31.03.2018

 

 

 

 

 

 

 

 

Unaudited

Unaudited

Audited

 

 

 

 

CAPITAL AND LIABILITIES

 

 

 

 

 

 

 

Capital

39,612

39,091

39,443

 

 

 

 

Reserves and Surplus

1,214,521

1,134,232

1,181,580

 

 

 

 

Deposits

11,818,242

9,721,075

11,199,249

 

 

 

 

Borrowings

887,349

873,320

1,153,350

 

 

 

 

Other Liabilities and Provisions

481,172

408,074

257,773

 

 

 

 

Total

14,440,896

12,175,792

13,831,395

 

 

 

 

ASSETS

 

 

 

 

 

 

 

Cash and Balances with Reserve Bank of India

571,829

472,637

513,276

 

 

 

 

Balance with Banks and Money at Call and Short Notice

242,941

404,869

407,065

 

 

 

 

Investments

2,821,385

2,631,750

3,078,107

 

 

 

 

Advances

10,094,088

8,064,588

9,195,747

 

 

 

 

Fixed Assets

45,705

47,203

45,737

 

 

 

 

Other Assets

664,948

554,745

591,463

 

 

 

 

Total

14,440,896

12,175,792

13,831,395

 

 

 

Notes:

 

 

 

 

 

 

 

1

The above Standalone Unaudited Financial Results for the quarter and half year ended September 30, 2018 were reviewed by the Audit Committee and approved by the Board of Directors at its meeting held on October 16, 2018. These Results have been subjected to "Limited review" by the Statutory Central Auditors of the Bank and an unqualified review report has been issued.

 

2

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

 

3

The Bank has followed the same significant accounting policies in the preparation of the interim financial results as those followed in the annual financial statements for the year ended March 31, 2018.

 

4

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

 

5

The Business operations of the Bank are largely concentrated in India and for the purpose of Segmental reporting, the bank is considered to operate only in domestic segment, though the bank has its operations in International Finance Service Centre (IFSC) Banking Unit in Gujarat International Finance Tec-city (GIFT). The business conducted from the same is considered as a part of Indian operations.

 

6

Other income includes fees earned from providing services to customers, commission from non-fund based banking activities, earnings from foreign exchange and derivative transactions, selling of third party products, profit on sale of investments (net), recoveries from advances written off etc.

 

7

During the quarter and half year ended September 30, 2018, the Bank has allotted 2,977,913 and 8,458,468 equity shares of ` 2 each, pursuant to the exercise of stock options by employees.

 

8

On marking to market its investments as at June 30, 2018 in Government Securities held under Available for Sale and Held for Trading category, the Bank has incurred net depreciation of ` 5,893.97 Lakhs.  As permitted vide RBI Circular DBR.No.BP.BC.113 /21.04.048/2017-18 dated June 15, 2018, the Bank has exercised the option of spreading the provision for such Marked to Market (MTM) losses equally over four quarters commencing from the quarter ended June 30, 2018. Accordingly, during the quarter and half year ended September 30, 2018, ` 1,473.49 Lakhs and ` 2,946.98 Lakhs has been charged to the profit and loss account respectively towards such MTM losses and the balance unamortised MTM Loss of ₹ 2,946.99 Lakhs has been carried forward, which shall be amortised in remaining quarters.

 

9

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

 

10

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 SHYAM SRINIVASAN

 

Mumbai

 

 

 MANAGING DIRECTOR & CEO

 

October 16, 2018

 

 

 (DIN: 02274773)

 
                               

 


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