SDF-24/ /2019-20 22nd January 2020
To,
The London Stock Exchange
Sub: Outcome of Board Meeting and submission of Unaudited Standalone and Consolidated Financial Results and Limited Review Report for the third quarter and nine months period ended 31st December 2019
Dear Sir,
This is to inform you that the Board of Directors of the Company at their meeting held on Monday, 20th January 2020 at Mumbai, has approved and adopted the Bank's unaudited standalone and consolidated financial results for the third quarter and nine months period ended 31st December 2019. The Limited Review Report submitted by the Statutory Auditors of the Company is also enclosed herewith.
Kindly take the same on your record.
For The Federal Bank Limited
Samir P Rajdev
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 the unaudited quarterly standalone financial results and standalone year to date financial results of The Federal Bank Limited pursuant to Regulation 33 of the Securities and Exchange Board of India (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 31 December 2019 and year to date results for the period from 1 April 2019 to 31 December 2019 (the 'Statement'), except for the disclosures relating to "Pillar 3 under Basel III Capital Regulations", and those relating to "Leverage Ratio", "Liquidity Coverage Ratio" under Capital Adequacy and Liquidity Standards issued by Reserve Bank of India ('RBI') 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. This Statement is the responsibility of the Bank's Management and has been approved by the Board of Directors. Our responsibility is to issue a report on the Statement based on our review.
2. 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 financial statements are free of material misstatement. A review is limited primarily to inquiries of company 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.
3. The Statement incorporate the relevant returns of 95 Branches and Treasury Branch reviewed by either of us and un-reviewed returns in respect of 1,160 branches. The Branches reviewed by us cover 50.53% of the advances portfolio (excluding outstanding of asset recovery branches and food credit advance) of the Bank and 51.16% of non-performing advances of the Bank.
Limited review report on the unaudited quarterly standalone financial results and standalone year to date financial results of The Federal Bank Limited pursuant to Regulation 33 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Continued)
4. Based on our review conducted as above, nothing has come to our attention that causes us to believe that the accompanying Statement of Unaudited Standalone Financial Results prepared in accordance with applicable accounting standards 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.
| 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 |
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| Akeel Master | Sanjay Khemani |
| Partner | Partner |
| Membership No: 046768 | Membership No: 044577 |
| ICAI UDIN: 20046768AAAABZ6772 | ICAI UDIN: 20044577AAAAAA4743 |
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| Mumbai | Mumbai |
| 20 January 2020 | 20 January 2020 |
| B S R & Co. LLP | M.M. Nissim & Co. |
| Chartered Accountants | Chartered Accountants |
| 5th Floor, Lodha Excelus | Barodawala Mansion, B-Wing |
| Apollo Mills Compound | 3rd Floor, 81 |
| N.M. Joshi Marg, Mahalaxmi | Dr. Annie Besant Road |
| Mumbai - 400 011 | Worli, Mumbai - 400 018 |
Independent Auditor's Review Report on consolidated unaudited quarterly and year to date financial results of The Federal Bank Limited pursuant to Regulation 33 of the Securities and Exchange Board of India (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'/ the 'Parent') and its subsidiaries (the Parent 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 31 December 2019 and year to date results for the period from 1 April 2019 to 31 December 2019 (the 'Statement'), being submitted by the Bank pursuant to the requirement of Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended, except for the disclosures relating to consolidated Pillar 3 disclosure as at 31 December 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 31 December 2018 and the corresponding period from 1 April 2018 to 31 December 2018, as reported in the Statement 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 has become mandatory only from 1 April 2019.
2. This Statement, which is the responsibility of the Parent's Management and approved by the Parent'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 express a conclusion on the Statement based on our review.
Independent Auditor's Review Report on consolidated unaudited quarterly and year to date financial results of The Federal Bank Limited pursuant to Regulation 33 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Continued)
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 SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended, 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 report of the other auditor referred to in paragraph 6 below and based on our assessment of the Financial Results/ financial information certified by the Board of Directors as stated in paragraph 7 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 SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended, including the manner in which it is to be disclosed, except for the disclosures relating to consolidated Pillar 3 disclosure as at 31 December 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.
Independent Auditor's Review Report on consolidated unaudited quarterly and year to date financial results of The Federal Bank Limited pursuant to Regulation 33 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Continued)
6. We did not review the interim financial results of two subsidiaries included in the Statement, whose interim financial results reflect total revenues of Rs. 13,072.47 lakhs and
Rs. 32,662.45 lakhs and total net profit after tax of Rs. 1,106.92 lakhs and Rs. 2,941.89 lakhs for the quarter ended 31 December 2019 and for the period from 1 April 2019 to
31 December 2019, respectively, 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, associates and joint ventures, is based solely on the reports 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 matters.
7. The Statement also includes the Group's share of net profit after tax of Rs. 270.04 lakhs and Rs. 724.48 lakhs for the quarter ended 31 December 2019 and for the period from
1 April 2019 to 31 December 2019, respectively, as considered in the consolidated unaudited financial results, in respect of two associates, based on their interim financial results which have not been reviewed/ audited. According to the information and explanations given to us by the management, these financial results are not material to the Group.
Our conclusion on the 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 |
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| Akeel Master | Sanjay Khemani |
| Partner | Partner |
| Membership No: 046768 | Membership No: 044577 |
| ICAI UDIN: 20046768AAAACA3829 | ICAI UDIN: 20044577AAAAAB1120 |
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| Mumbai | Mumbai |
| 20 January 2020 | 20 January 2020 |
| THE FEDERAL BANK LIMITED |
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| REGD.OFFICE: P.B.NO. 103, FEDERAL TOWERS, ALUVA-683101 |
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| (CIN: L65191KL1931PLC000368) |
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| STANDALONE UNAUDITED FINANCIAL RESULTS FOR THE QUARTER AND NINE MONTHS ENDED DECEMBER 31, 2019 |
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| Particulars | Quarter ended | Nine months ended | Year ended |
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| 31.12.2019 | 30.09.2019 | 31.12.2018 | 31.12.2019 | 31.12.2018 | 31.03.2019 |
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| Unaudited | Unaudited | Unaudited | Unaudited | Unaudited | Audited |
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| 1. Interest earned (a)+(b)+(c)+(d) | 3,33,036 | 3,25,425 | 2,95,441 | 9,81,391 | 8,38,671 | 11,41,903 |
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| (a) | Interest/discount on advances/bills | 2,70,278 | 2,63,766 | 2,38,662 | 7,94,652 | 6,67,657 | 9,08,962 | |||
| (b) | Income on investments | 53,611 | 52,744 | 50,558 | 1,61,878 | 1,50,107 | 2,03,745 | |||
| (c) | Interest on balances with Reserve Bank of India and other inter bank funds | 3,527 | 3,811 | 1,557 | 9,310 | 6,169 | 7,347 | |||
| (d) | Others | 5,620 | 5,104 | 4,664 | 15,551 | 14,738 | 21,849 |
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| 2. Other income | 40,786 | 42,092 | 34,555 | 1,22,030 | 93,930 | 1,35,102 |
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| 3. TOTAL INCOME (1+2) | 3,73,822 | 3,67,517 | 3,29,996 | 11,03,421 | 9,32,601 | 12,77,005 |
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| 4. Interest expended | 2,17,543 | 2,13,047 | 1,87,712 | 6,38,102 | 5,30,689 | 7,24,268 |
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| 5. Operating expenses (i)+(ii) | 81,897 | 82,590 | 71,501 | 2,40,781 | 2,01,077 | 2,76,427 |
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| (i) | Employees cost | 41,476 | 44,070 | 35,366 | 1,25,330 | 1,00,761 | 1,37,776 |
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| (ii) | Other operating expenses | 40,421 | 38,520 | 36,135 | 1,15,451 | 1,00,316 | 1,38,651 |
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| 6. TOTAL EXPENDITURE (4+5) | 2,99,440 | 2,95,637 | 2,59,213 | 8,78,883 | 7,31,766 | 10,00,695 |
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| 7. OPERATING PROFIT (3-6) | 74,382 | 71,880 | 70,783 | 2,24,538 | 2,00,835 | 2,76,310 |
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| 8. Provisions (other than tax) and contingencies | 16,086 | 25,177 | 19,012 | 60,467 | 67,809 | 85,585 |
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| 9. Exceptional items |
| - | - | - | - | - | - |
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| 10. Profit from Ordinary Activities before tax | 58,296 | 46,703 | 51,771 | 1,64,071 | 1,33,026 | 1,90,725 |
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| 11. Tax expense |
| 14,232 | 5,033 | 18,408 | 39,916 | 46,788 | 66,336 |
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| 12. Net Profit from Ordinary Activities after tax (10-11) | 44,064 | 41,670 | 33,363 | 1,24,155 | 86,238 | 1,24,389 |
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| 13. Extraordinary items (net of tax expense) |
| - | - | - | - | - | - |
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| 14. Net Profit for the period (12-13) |
| 44,064 | 41,670 | 33,363 | 1,24,155 | 86,238 | 1,24,389 |
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| 15. Paid-up Equity Share Capital | 39,846 | 39,762 | 39,678 | 39,846 | 39,678 | 39,701 |
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| 16. Reserves excluding Revaluation Reserve |
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| 12,87,102 |
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| 17. Analytical Ratios |
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| (i) | Percentage of shares held by Government of India | NIL | NIL | NIL | NIL | NIL | NIL |
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| (ii) | Capital Adequacy ratio (%) |
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| Under Basel III | 13.64 | 13.98 | 12.97 | 13.64 | 12.97 | 14.14 |
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| (iii) | Earnings per Share (EPS) (in `) |
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| (a) Basic EPS (before and after extra ordinary items) | 2.21* | 2.10* | 1.68* | 6.25* | 4.36* | 6.28 |
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| (b) Diluted EPS (before and after extra ordinary items) | 2.20* | 2.08* | 1.67* | 6.21* | 4.33* | 6.24 |
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| (iv) | NPA Ratios |
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| a) Gross NPA | 3,61,869 | 3,61,211 | 3,36,123 | 3,61,869 | 3,36,123 | 3,26,068 |
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| b) Net NPA | 1,94,101 | 1,84,364 | 1,81,729 | 1,94,101 | 1,81,729 | 1,62,620 |
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| c) % of Gross NPA | 2.99 | 3.07 | 3.14 | 2.99 | 3.14 | 2.92 |
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| d) % of Net NPA | 1.63 | 1.59 | 1.72 | 1.63 | 1.72 | 1.48 |
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| (v) | Return on Assets (%) | 0.26* | 0.26* | 0.23* | 0.77* | 0.62* | 0.88 |
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| * Not Annualised |
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| Segment Information@ |
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| (` in Lakhs) |
| Particulars | Quarter ended | Nine months ended | Year ended | ||||
| 31.12.2019 | 30.09.2019 | 31.12.2018 | 31.12.2019 | 31.12.2018 | 31.03.2019 | ||
| Unaudited | Unaudited | Unaudited | Unaudited | Unaudited | Audited | ||
| Segment Revenue: |
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| Treasury | 70,179 | 68,830 | 64,236 | 2,11,973 | 1,88,247 | 2,54,761 |
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| Corporate/Wholesale Banking | 1,35,913 | 1,38,806 | 1,30,916 | 4,22,800 | 3,62,297 | 5,07,376 |
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| Retail Banking | 1,60,131 | 1,52,491 | 1,28,913 | 4,47,953 | 3,66,489 | 4,88,342 |
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| Other Banking operations | 7,599 | 7,390 | 5,931 | 20,695 | 15,568 | 26,526 |
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| Unallocated | - | - | - | - | - | - |
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| Total Revenue | 3,73,822 | 3,67,517 | 3,29,996 | 11,03,421 | 9,32,601 | 12,77,005 |
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| Less: Inter Segment Revenue | - | - | - | - | - | - |
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| Income from Operations | 3,73,822 | 3,67,517 | 3,29,996 | 11,03,421 | 9,32,601 | 12,77,005 |
| Segment Results (net of provisions): |
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| Treasury | 15,456 | 12,259 | 16,870 | 43,167 | 30,134 | 41,085 |
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| Corporate/Wholesale Banking | (11,340) | (4,633) | 4,728 | 2,801 | 11,641 | 25,969 |
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| Retail Banking | 54,381 | 39,012 | 30,613 | 1,19,712 | 91,998 | 1,20,186 |
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| Other Banking operations | 620 | 2,157 | 444 | 1,849 | 1,410 | 6,690 |
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| Unallocated | (821) | (2,092) | (884) | (3,458) | (2,157) | (3,205) |
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| Profit before tax | 58,296 | 46,703 | 51,771 | 1,64,071 | 1,33,026 | 1,90,725 |
| Segment Assets |
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| Treasury | 35,19,353 | 34,09,896 | 30,72,544 | 35,19,353 | 30,72,544 | 35,75,297 |
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| Corporate/Wholesale Banking | 60,00,398 | 59,08,518 | 56,43,373 | 60,00,398 | 56,43,373 | 58,16,960 |
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| Retail Banking | 65,35,673 | 62,19,085 | 53,95,943 | 65,35,673 | 53,95,943 | 56,68,073 |
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| Other Banking operations | 2,049 | 1,927 | 2,057 | 2,049 | 2,057 | 1,138 |
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| Unallocated | 12,21,607 | 11,03,023 | 8,64,000 | 12,21,607 | 8,64,000 | 8,72,531 |
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| Total | 1,72,79,080 | 1,66,42,449 | 1,49,77,917 | 1,72,79,080 | 1,49,77,917 | 1,59,33,999 |
| Segment Liabilities |
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| Treasury | 34,06,295 | 32,85,495 | 29,23,393 | 34,06,295 | 29,23,393 | 34,76,144 |
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| Corporate/Wholesale Banking | 59,22,863 | 57,97,969 | 54,71,439 | 59,22,863 | 54,71,439 | 56,00,730 |
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| Retail Banking | 64,58,732 | 61,07,417 | 52,34,444 | 64,58,732 | 52,34,444 | 54,61,130 |
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| Other Banking operations | 14 | - | 2 | 14 | 2 | 4 |
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| Unallocated | 70,038 | 76,137 | 59,914 | 70,038 | 59,914 | 68,687 |
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| Total | 1,58,57,942 | 1,52,67,018 | 1,36,89,192 | 1,58,57,942 | 1,36,89,192 | 1,46,06,695 |
| Capital employed: |
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| (Segment Assets - Segment Liabilities) |
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| Treasury | 1,13,058 | 1,24,401 | 1,49,151 | 1,13,058 | 1,49,151 | 99,153 |
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| Corporate/Wholesale Banking | 77,535 | 1,10,549 | 1,71,934 | 77,535 | 1,71,934 | 2,16,230 |
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| Retail Banking | 76,941 | 1,11,668 | 1,61,499 | 76,941 | 1,61,499 | 2,06,943 |
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| Other Banking operations | 2,035 | 1,927 | 2,055 | 2,035 | 2,055 | 1,134 |
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| Unallocated | 11,51,569 | 10,26,886 | 8,04,086 | 11,51,569 | 8,04,086 | 8,03,844 |
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| Total | 14,21,138 | 13,75,431 | 12,88,725 | 14,21,138 | 12,88,725 | 13,27,304 |
| @ | For the above segment reporting, the reportable segments are identified as Treasury, Corporate/Wholesale Banking, Retail Banking and Other Banking Operations in compliance with the RBI guidelines. | ||||||
| Notes: |
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| 1 | The above Standalone Unaudited Financial Results for the quarter and nine months ended December 31, 2019 were reviewed by the Audit Committee and approved by the Board of Directors at its meeting held on January 20, 2020. These Results have been subjected to "Limited review" by the Statutory Central Auditors of the Bank and an unqualified review report has been issued. | ||||||
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| 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. | ||||||
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| 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. | ||||||
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| 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. | ||||||
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| 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. | ||||||
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| 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. | ||||||
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| 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. | ||||||
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| 8 | During the quarter and nine months ended December 31, 2019, the Bank has allotted 4,158,177 and 7,226,229 equity shares of ` 2 each, pursuant to the exercise of stock options by employees. | ||||||
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| 9 | During the quarter ended September 30, 2019, the Bank had 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 nine months ended December 31, 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. | ||||||
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| 10 | 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. | ||||||
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| 11 | During the quarter ended December 31, 2019, the Bank has invested ` 500.00 Lakhs in the Preference share capital of its subsidiary Federal Operations and Services Limited. | ||||||
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| 12 | During the quarter ended December 31, 2019 the Bank has decided to use actuarial valuation for the estimation of debit card loyalty points liability on a quarterly basis as against the earlier practice of taking actuarial valuation only on an annual basis. This has resulted in a lower provision charge by ` 842.79 lakhs (net of taxes) in the current quarter. | ||||||
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| 13 | Previous period's / year's figures have been regrouped / reclassified, where necessary to conform to current period's classification. | ||||||
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| SHYAM SRINIVASAN | ||||
| Mumbai |
| MANAGING DIRECTOR & CEO | |||||
| January 20, 2020 |
| (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 NINE MONTHS ENDED DECEMBER 31, 2019 | |||||||
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| (` in Lakhs) |
| Particulars | Quarter ended | Nine months ended | Year ended | ||||
| 31.12.2019 | 30.09.2019 | 31.12.2018 | 31.12.2019 | 31.12.2018 | 31.03.2019 | ||
| Unaudited | Unaudited | Unaudited | Unaudited | Unaudited | Audited | ||
| 1. Interest earned (a)+(b)+(c)+(d) | 3,41,395 | 3,33,675 | 3,00,272 | 10,04,591 | 8,52,879 | 11,63,544 | |
| (a) | Interest/discount on advances/bills | 2,78,601 | 2,72,087 | 2,43,441 | 8,17,740 | 6,81,706 | 9,30,412 |
| (b) | Income on investments | 53,647 | 52,674 | 50,610 | 1,61,990 | 1,50,266 | 2,03,936 |
| (c) | Interest on balances with Reserve Bank of India and other inter bank funds | 3,527 | 3,810 | 1,557 | 9,310 | 6,169 | 7,347 |
| (d) | Others | 5,620 | 5,104 | 4,664 | 15,551 | 14,738 | 21,849 |
| 2. Other income | 42,076 | 41,169 | 34,606 | 1,20,342 | 94,010 | 1,33,522 | |
| 3. TOTAL INCOME (1+2) | 3,83,471 | 3,74,844 | 3,34,878 | 11,24,933 | 9,46,889 | 12,97,066 | |
| 4. Interest expended | 2,20,564 | 2,15,422 | 1,89,627 | 6,45,694 | 5,36,263 | 7,31,633 | |
| 5. Operating expenses (i)+(ii) | 86,872 | 86,305 | 73,345 | 2,52,254 | 2,05,967 | 2,83,658 | |
| (i) | Employees cost | 44,365 | 46,321 | 36,602 | 1,32,227 | 1,04,056 | 1,42,566 |
| (ii) | Other operating expenses | 42,507 | 39,984 | 36,743 | 1,20,027 | 1,01,911 | 1,41,092 |
| 6. TOTAL EXPENDITURE (4+5) | 3,07,436 | 3,01,727 | 2,62,972 | 8,97,948 | 7,42,230 | 10,15,291 | |
| 7. OPERATING PROFIT (3-6) | 76,035 | 73,117 | 71,906 | 2,26,985 | 2,04,659 | 2,81,775 | |
| 8. Provisions (other than tax) and contingencies | 16,254 | 25,343 | 19,180 | 60,928 | 67,734 | 85,765 | |
| 9. Exceptional items |
| - | - | - | - | - | - |
| 10. Profit from Ordinary Activities before tax | 59,781 | 47,774 | 52,726 | 1,66,057 | 1,36,925 | 1,96,010 | |
| 11. Tax expense |
| 14,609 | 5,334 | 18,637 | 41,075 | 47,780 | 67,758 |
| 12. Net Profit from Ordinary Activities after tax (10-11) | 45,172 | 42,440 | 34,089 | 1,24,982 | 89,145 | 1,28,252 | |
| 13. Extraordinary items (net of tax expense) |
| - | - | - | - | - | - |
| 14. Net Profit for the period (12-13) |
| 45,172 | 42,440 | 34,089 | 1,24,982 | 89,145 | 1,28,252 |
| 15. Minority interest |
| 280 | 129 | 136 | 591 | 136 | 180 |
| 16. Share in Profit of Associates |
| 270 | 223 | 27 | 725 | 327 | 3,556 |
| 17. Consolidated Net Profit of the group | 45,162 | 42,534 | 33,980 | 1,25,116 | 89,336 | 1,31,628 | |
| 18. Paid-up Equity Share Capital | 39,846 | 39,762 | 39,678 | 39,846 | 39,678 | 39,701 | |
| 19. Reserves excluding Revaluation Reserve |
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| 13,09,624 | |
| 20. Analytical Ratios |
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| (i) | Percentage of shares held by Government of India | NIL | NIL | NIL | NIL | NIL | NIL |
| (ii) | Capital Adequacy ratio (%) |
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| Under Basel III | 13.88 | 14.32 | 13.26 | 13.88 | 13.26 | 14.43 |
| (iii) | Earnings per Share (EPS) (in `) |
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| (a) Basic EPS (before and after extra ordinary items) | 2.27* | 2.14* | 1.71* | 6.29* | 4.51* | 6.65 |
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| (b) Diluted EPS (before and after extra ordinary items) | 2.26* | 2.13* | 1.70* | 6.26* | 4.49* | 6.60 |
| (iv) | NPA Ratios |
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| a) Gross NPA | 3,65,657 | 3,65,317 | 3,39,473 | 3,65,657 | 3,39,473 | 3,30,178 |
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| b) Net NPA | 1,97,379 | 1,87,941 | 1,84,706 | 1,97,379 | 1,84,706 | 1,66,218 |
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| c) % of Gross NPA | 2.97 | 3.06 | 3.14 | 2.97 | 3.14 | 2.92 |
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| d) % of Net NPA | 1.63 | 1.60 | 1.73 | 1.63 | 1.73 | 1.49 |
| (v) | Return on Assets (%) | 0.26* | 0.26* | 0.23* | 0.75* | 0.62* | 0.88 |
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| * Not Annualised |
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| Segment Information@ |
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| (` in Lakhs) |
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| Particulars | Quarter ended | Nine months ended | Year ended | ||||
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| 31.12.2019 | 30.09.2019 | 31.12.2018 | 31.12.2019 | 31.12.2018 | 31.03.2019 | ||
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| Unaudited | Unaudited | Unaudited | Unaudited | Unaudited | Audited | ||
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| Segment Revenue: |
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| Treasury | 70,179 | 68,830 | 64,236 | 2,09,890 | 1,88,247 | 2,54,761 |
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| Corporate/Wholesale Banking | 1,35,913 | 1,38,806 | 1,30,916 | 4,22,800 | 3,62,297 | 5,07,376 |
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| Retail Banking | 1,69,780 | 1,59,818 | 1,33,795 | 4,71,548 | 3,80,777 | 5,08,403 |
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| Other Banking operations | 7,599 | 7,390 | 5,931 | 20,695 | 15,568 | 26,526 |
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| Unallocated | - | - | - | - | - | - |
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| Total Revenue | 3,83,471 | 3,74,844 | 3,34,878 | 11,24,933 | 9,46,889 | 12,97,066 |
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| Less: Inter Segment Revenue | - | - | - | - | - | - |
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| Income from Operations | 3,83,471 | 3,74,844 | 3,34,878 | 11,24,933 | 9,46,889 | 12,97,066 |
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| Segment Results (net of provisions): |
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| Treasury | 15,456 | 12,258 | 16,848 | 41,052 | 30,518 | 41,469 |
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| Corporate/Wholesale Banking | (11,339) | (4,633) | 4,728 | 2,801 | 11,641 | 25,969 |
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| Retail Banking | 55,821 | 40,043 | 31,590 | 1,23,709 | 95,513 | 1,25,087 |
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| Other Banking operations | 664 | 2,198 | 444 | 1,953 | 1,410 | 6,690 |
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| Unallocated | (821) | (2,092) | (884) | (3,458) | (2,157) | (3,205) |
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| Profit before tax | 59,781 | 47,774 | 52,726 | 1,66,057 | 1,36,925 | 1,96,010 |
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| Segment Assets |
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| Treasury | 35,21,335 | 34,11,608 | 30,72,811 | 35,21,335 | 30,72,811 | 35,78,232 |
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| Corporate/Wholesale Banking | 60,00,398 | 59,08,518 | 56,43,373 | 60,00,398 | 56,43,373 | 58,16,960 |
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| Retail Banking | 67,43,853 | 63,86,249 | 55,07,136 | 67,43,853 | 55,07,136 | 57,86,386 |
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| Other Banking operations | 1,409 | 1,057 | 2,057 | 1,409 | 2,057 | 1,138 |
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| Unallocated | 12,21,607 | 11,03,023 | 8,64,000 | 12,21,607 | 8,64,000 | 8,72,531 |
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| Total | 1,74,88,602 | 1,68,10,455 | 1,50,89,377 | 1,74,88,602 | 1,50,89,377 | 1,60,55,247 |
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| Segment Liabilities |
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| Treasury | 34,06,295 | 32,85,495 | 29,23,393 | 34,06,295 | 29,23,393 | 34,76,144 |
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| Corporate/Wholesale Banking | 59,22,863 | 57,97,969 | 54,71,439 | 59,22,863 | 54,71,439 | 56,00,730 |
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| Retail Banking | 66,24,970 | 62,33,582 | 53,19,128 | 66,24,970 | 53,19,128 | 55,51,810 |
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| Other Banking operations | 14 | - | 2 | 14 | 2 | 4 |
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| Unallocated | 70,038 | 76,137 | 59,914 | 70,038 | 59,914 | 68,687 |
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| Total | 1,60,24,180 | 1,53,93,183 | 1,37,73,876 | 1,60,24,180 | 1,37,73,876 | 1,46,97,375 |
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| Capital employed: |
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| (Segment Assets - Segment Liabilities) |
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| Treasury | 1,15,040 | 1,26,113 | 1,49,418 | 1,15,040 | 1,49,418 | 1,02,088 |
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| Corporate/Wholesale Banking | 77,535 | 1,10,549 | 1,71,934 | 77,535 | 1,71,934 | 2,16,230 |
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| Retail Banking | 1,18,883 | 1,52,667 | 1,88,008 | 1,18,883 | 1,88,008 | 2,34,576 |
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| Other Banking operations | 1,395 | 1,057 | 2,055 | 1,395 | 2,055 | 1,134 |
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| Unallocated | 11,51,569 | 10,26,886 | 8,04,086 | 11,51,569 | 8,04,086 | 8,03,844 |
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| Total | 14,64,422 | 14,17,272 | 13,15,501 | 14,64,422 | 13,15,501 | 13,57,872 |
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| @ | For the above segment reporting, the reportable segments are identified as Treasury, Corporate/Wholesale Banking, Retail Banking and Other Banking Operations in compliance with the RBI guidelines. | ||||||
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| Notes: |
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| 1 | The above Consolidated Financial Results for the quarter and nine months ended December 31, 2019 were reviewed by the Audit Committee and subsequently taken on record and approved by the Board of Directors at its meeting held on January 20, 2020. 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 nine months ended December 31, 2018 has been approved by the Bank's Board of Directors, but has not been subjected to review since the requirement of submission of quarterly consolidated financial results has become mandatory only from April 01, 2019. | ||||||
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| 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. | ||||||
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| 3 | There has been no material change in the accounting policies adopted during the quarter and nine months ended December 31, 2019 as compared to those followed for the year ended March 31, 2019. | ||||||
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| 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. | ||||||
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| 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. | ||||||
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| 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. | ||||||
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| 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. | ||||||
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| 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. | ||||||
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| 9 | During the quarter and nine months ended December 31, 2019, the Bank has allotted 4,158,177 and 7,226,229 equity shares of ` 2 each, pursuant to the exercise of stock options by employees. | ||||||
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| 10 | During the quarter ended September 30, 2019, 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 nine months ended December 31, 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. | ||||||
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| 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. | ||||||
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| 12 | During the quarter ended December 31, 2019, the Bank has invested ` 500.00 Lakhs in the Preference share capital of its subsidiary Federal Operations and Services Limited. | ||||||
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| 13 | During the quarter ended December 31, 2019 the Bank has decided to use actuarial valuation for the estimation of debit card loyalty points liability on a quarterly basis as against the earlier practice of taking actuarial valuation only on an annual basis. This has resulted in a lower provision charge by ` 842.79 lakhs (net of taxes) in the current quarter. | ||||||
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| 14 | Previous period's / year's figures have been regrouped / reclassified, where necessary to conform to current period's classification. | ||||||
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| SHYAM SRINIVASAN | ||||
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| Mumbai |
| MANAGING DIRECTOR & CEO | |||||
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| January 20, 2020 |
| (DIN: 02274773) | |||||
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