Sharemasterindia.com: Federal Bank shares declined nearly 10 per cent on Monday after the
private sector lender reported a sharp surge in bad loans during the
June quarter.
Gross non-performing assets jumped to 2.6 per cent of advances as against 2.04 per cent in the previous quarter, while net NPA rose to 0.86 per cent of advances from 0.73 per cent in the March quarter.
In absolute numbers, Federal Bank's gross NPL was at Rs 1,304 crore, a sequential rise of 23 per cent, while net NPL was at Rs 484 crore, a jump of 30 per cent as compared to the previous quarter.
Shyam Srinivasan, MD & CEO of Federal Bank attributed the spurt in bad loans to one large account (company in the metal space) going bad in the June quarter.
"We took a hit of Rs 134 crore because of significant slippage in one large account... We have made a provision of Rs 70 crore for this account," said Mr Srinivasan.
Rising bad loans hit Federal Bank's profitability with net profit dropping to Rs 141 crore against Rs 220 crore in the corresponding quarter of last year. Federal Bank's net interest income (interest earned on loans minus interest given on deposits) rose to Rs 604 crore in the June quarter against Rs 564 crore in the year ago period.
As of 09.54 a.m., Federal Bank shares traded 7 per cent lower at Rs 70.50 in a market that was down 0.2 per cent.
Read More : Indian Stock Tips
Gross non-performing assets jumped to 2.6 per cent of advances as against 2.04 per cent in the previous quarter, while net NPA rose to 0.86 per cent of advances from 0.73 per cent in the March quarter.
In absolute numbers, Federal Bank's gross NPL was at Rs 1,304 crore, a sequential rise of 23 per cent, while net NPL was at Rs 484 crore, a jump of 30 per cent as compared to the previous quarter.
Shyam Srinivasan, MD & CEO of Federal Bank attributed the spurt in bad loans to one large account (company in the metal space) going bad in the June quarter.
"We took a hit of Rs 134 crore because of significant slippage in one large account... We have made a provision of Rs 70 crore for this account," said Mr Srinivasan.
Rising bad loans hit Federal Bank's profitability with net profit dropping to Rs 141 crore against Rs 220 crore in the corresponding quarter of last year. Federal Bank's net interest income (interest earned on loans minus interest given on deposits) rose to Rs 604 crore in the June quarter against Rs 564 crore in the year ago period.
As of 09.54 a.m., Federal Bank shares traded 7 per cent lower at Rs 70.50 in a market that was down 0.2 per cent.
Read More : Indian Stock Tips
