RNS Number : 6171M
Federal Bank Ltd (The)
22 January 2021
 

UNAUDITED STANDALONE AND CONSOLIDATED FINANCIAL RESULTS OF THE FEDERAL BANK LIMITED FOR THE QUARTER AND NINE MONTHS ENDED 31ST DECEMBER, 2020

 

Varma & Varma                                                                                   Borkar & Muzumdar

Chartered Accountants,                                                                     Chartered Accountants

No.53/2600, Kerala Varma Tower                                                    Anand Nagar, Om Co-op

Off Kunjanbava Road,                                                                          Hsg Society, Anand Nagar Lane

Vytilla,                                                                                                    Off Nehru Road, Santacruz(East)

Kochi -682019                                                                                     Mumbai - 400 055

 

 

Limited Review Report on unaudited standalone financial results of The Federal Bank Limited for the quarter and nine months ended 31st December, 2020, pursuant to the requirements of Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015

 

 

Review Report to

The Board of Directors,

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 and nine months ended 31st December, 2020 ('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), except for the disclosures relating to Pillar 3 disclosure under Basel III Capital Regulations, as at 31st December, 2020, including Leverage Ratio and Liquidity Coverage Ratio as have been disclosed on the Bank's website and in respect of which a link has been provided in the aforesaid Statement, which have not been reviewed by us.

2.          The Statement is the responsibility of the Bank's Management and has been approved by the Bank's Board of Directors. The Statement 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 (the 'RBI') from time to time (the 'RBI Guidelines'), SEBI circular CIR/CFD/FAC/62/2016 dated 5th July, 2016 (hereinafter referred to as the 'SEBI Circular'), 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 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 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.

 

4.          Our review primarily is conducted on the basis of review of the books of account and records of the Bank. We have also relied on the information and explanations furnished to us by the Bank and the returns as considered necessary by us for the review.

 

5.          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, the RBI Guidelines, the SEBI circular 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 (as amended) 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.

 

6.          We draw attention to Note No.10 of the accompanying Statement of Unaudited Standalone Financial results, regarding the impact of COVID-19 pandemic, and adjustments made in the accounts for the quarter and nine months ended 31st December, 2020 on account of the same. As stated therein, in view of continuing uncertainties, the extent of impact of the pandemic on the Bank's operations and financial position would depend on various aspects, including actions taken to mitigate its impact and other regulatory measures. 

 

Our conclusion on the Statement is not modified in respect of this matter.

 

7.          The  review of unaudited quarterly and nine month financial results for the  quarter and nine months ended 31st December 2019 and audit of financial results for the year ended 31st  March 2020 included in the Statement were carried out and reported by predecessor auditors who have expressed unmodified conclusion vide review reports dated 20th January, 2020 for the period ended 31st December, 2019 and unmodified opinion vide audit report dated 28th May, 2020, whose reports have been furnished to us and which have been relied upon by us for the purpose of our review of the Statement.

 

Our conclusion on the Statement is not modified in respect of this matter.

               

For Varma & Varma                                                                             For Borkar & Muzumdar

Chartered Accountants                                                                      Chartered Accountants

FRN:004532S                                                                                        FRN:101569W

                                               

                                                                               

 

R Rajasekharan                                                                                     Devang Vaghani

Partner                                                                                                   Partner

M. No. 22703                                                                                        M. No. 109386

UDIN: 21022703AAAAAB8424                                                           UDIN: 21109386AAAAAW8601

 

Kochi-19                                                                                                  Mumbai-55

20th January 2021                                                                                20th January 2021

 

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, 2020

 

 

 

 

 

 

 

 (` in Lakhs)

Particulars

Quarter ended

Nine months ended

Year ended

31.12.2020

30.09.2020

31.12.2019

31.12.2020

31.12.2019

31.03.2020

Unaudited

Unaudited

Unaudited

Unaudited

Unaudited

Audited

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

       345,952

       348,790

       333,036

    1,039,157

       981,391

    1,321,075

(a)

Interest/discount on advances/bills

       271,321

       271,749

       270,278

       813,668

       794,652

    1,067,087

(b)

Income on investments

         57,361

         59,252

         53,611

       177,225

       161,878

       218,407

(c)

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

         11,469

         11,661

           3,527

         30,197

           9,310

         13,996

(d)

Others

           5,801

           6,128

           5,620

         18,067

         15,551

         21,585

2. Other income

         48,184

         50,933

         40,786

       147,954

       122,030

       193,141

3. TOTAL INCOME (1+2)

     394,136

     399,723

     373,822

  1,187,111

  1,103,421

  1,514,216

4. Interest expended

       202,248

       210,805

       217,543

       627,824

       638,102

       856,185

5. Operating expenses (i)+(ii)

         95,598

         88,265

         81,897

       269,106

       240,781

       337,561

(i)

Employees cost

         52,564

         48,746

         41,476

       150,895

       125,330

       177,236

(ii)

Other operating expenses

         43,034

         39,519

         40,421

       118,211

       115,451

       160,325

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

     297,846

     299,070

     299,440

     896,930

     878,883

  1,193,746

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

       96,290

     100,653

       74,382

     290,181

     224,538

     320,470

8. Provisions (other than tax) and contingencies

         42,062

         59,206

         16,086

       140,730

         60,467

       117,217

9. Exceptional items

 

                 -  

                 -  

                 -  

                 -  

                 -  

                 -  

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

       54,228

       41,447

       58,296

     149,451

     164,071

     203,253

11. Tax expense

 

         13,818

         10,685

         14,232

         38,202

         39,916

         48,975

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

       30,762

       44,064

     111,249

     124,155

     154,278

13. Extraordinary items (net of tax expense)

 

                 -  

                 -  

                 -  

                 -  

                 -  

                 -  

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

 

       40,410

       30,762

       44,064

     111,249

     124,155

     154,278

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

         39,917

         39,893

         39,846

         39,917

         39,846

         39,853

16. Reserves excluding Revaluation Reserve

 

 

 

 

 

    1,411,407

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

           14.31

           14.64

           13.64

           14.31

           13.64

           14.35

(iii)

Earnings per Share (EPS) (in `)

 

 

 

 

 

 

 

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

2.03*

1.54*

2.21*

 5.58*

 6.25*

             7.76

 

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

2.02*

1.54*

2.20*

 5.56*

 6.21*

             7.70

(iv)

NPA Ratios

 

 

 

 

 

 

 

a) Gross NPA

       347,018

       355,219

       361,869

       347,018

       361,869

       353,083

 

b) Net NPA

         75,724

       121,814

       194,101

         75,724

       194,101

       160,717

 

c) % of Gross NPA

             2.71

             2.84

             2.99

             2.71

             2.99

             2.84

 

d) % of Net NPA

             0.60

             0.99

             1.63

             0.60

             1.63

             1.31

(v)

Return on Assets (%)

0.21*

0.16*

 0.26*

 0.60*

 0.77*

             0.94

 

 

 

 

 

 

 

 

* Not Annualised

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Segment Information@

 

 

 

 

 

 

 

 

 

 

 

 

 

 (` in Lakhs)

Particulars

Quarter ended

Nine months ended

Year ended

31.12.2020

30.09.2020

31.12.2019

31.12.2020

31.12.2019

31.03.2020

Unaudited

Unaudited

Unaudited

Unaudited

Unaudited

Audited

Segment Revenue:

 

 

 

 

 

 

 

Treasury

             61,868

             60,754

             42,497

           216,404

           158,272

           226,846

 

Corporate/Wholesale Banking

           104,742

           131,976

           122,589

           352,612

           368,790

           489,365

 

Retail Banking

           227,526

           206,993

           208,736

           618,095

           576,359

           798,005

 

Other Banking operations

                     -  

                     -  

                     -  

                     -  

                     -  

                     -  

 

Unallocated

                     -  

                     -  

                     -  

                     -  

                     -  

                     -  

 

Total Revenue

         394,136

         399,723

         373,822

      1,187,111

      1,103,421

      1,514,216

 

Less: Inter Segment Revenue

                     -  

                     -  

                     -  

                     -  

                     -  

                     -  

 

Income from Operations

         394,136

         399,723

         373,822

      1,187,111

      1,103,421

      1,514,216

Segment Results (net of provisions):

 

 

 

 

 

 

 

Treasury

             12,234

               4,154

               1,197

             59,016

             26,495

             41,518

 

Corporate/Wholesale Banking

              (1,994)

             15,063

               6,386

               4,920

             35,966

             17,058

 

Retail Banking

             43,986

             22,230

             50,953

             85,515

           101,850

           145,113

 

Other Banking operations

                     -  

                     -  

                     -  

                     -  

                     -  

                     -  

 

Unallocated

                      2

                     -  

                (240)

                     -  

                (240)

                 (436)

 

Profit before tax

            54,228

            41,447

           58,296

         149,451

         164,071

         203,253

Segment Assets

 

 

 

 

 

 

 

 

Treasury

        4,510,555

        4,378,891

        3,298,796

        4,510,555

        3,298,796

        3,787,323

 

Corporate/Wholesale Banking

        6,674,295

        6,809,139

        6,902,969

        6,674,295

        6,902,969

        7,056,243

 

Retail Banking

        7,428,474

        6,937,457

        6,322,326

        7,428,474

        6,322,326

        6,480,887

 

Other Banking operations

                     -  

                     -  

                     -  

                     -  

                     -  

                     -  

 

Unallocated

        1,071,333

           777,184

           754,989

        1,071,333

           754,989

           739,352

 

Total

    19,684,657

    18,902,671

   17,279,080

   19,684,657

   17,279,080

    18,063,805

Segment Liabilities

 

 

 

 

 

 

 

 

Treasury

        1,342,363

        1,305,303

        1,136,410

        1,342,363

        1,136,410

        1,627,269

 

Corporate/Wholesale Banking

        1,494,931

        1,405,908

        1,040,060

        1,494,931

        1,040,060

        1,258,540

 

Retail Banking

      15,084,901

      14,461,623

      13,494,733

      15,084,901

      13,494,733

      13,458,149

 

Other Banking operations

                     -  

                     -  

                     -  

                     -  

                     -  

                     -  

 

Unallocated

           197,972

           206,312

           186,739

           197,972

           186,739

           268,086

 

Total

    18,120,167

    17,379,146

   15,857,942

   18,120,167

   15,857,942

    16,612,044

Capital employed:

 

 

 

 

 

 

(Segment Assets - Segment Liabilities)

  

 

Treasury

        3,168,192

        3,073,588

        2,162,386

        3,168,192

        2,162,386

        2,160,054

 

Corporate/Wholesale Banking

        5,179,364

        5,403,231

        5,862,909

        5,179,364

        5,862,909

        5,797,703

 

Retail Banking

       (7,656,427)

       (7,524,166)

      (7,172,407)

      (7,656,427)

      (7,172,407)

       (6,977,262)

 

Other Banking operations

                     -  

                     -  

                     -  

                     -  

                     -  

                     -  

 

Unallocated

           873,361

           570,872

           568,250

           873,361

           568,250

           471,266

 

Total

      1,564,490

      1,523,525

      1,421,138

      1,564,490

      1,421,138

      1,451,761

@

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:

1

The above Standalone Unaudited Financial Results for the quarter and nine months ended December 31, 2020 were reviewed by the Audit Committee and approved by the Board of Directors at its meeting held on January 20, 2021. 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 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, 2020.

3

Pursuant to Board approved policy on preparation of segment information, the Bank, with effect from quarter ended June 30, 2020, has revised the basis of preparation of segment information on a direct identification basis with the aid of Internal Transfer pricing mechanism for more appropriate presentation of the segment results. Accordingly, figures for the previous periods have been regrouped / reclassified to conform to current period's classification. 

The change in segment information has no impact on the overall Revenue, Results, and Capital employed of the bank for the quarter and nine months ended December 31, 2020 or the previous periods/year.

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

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 nine months ended December 31, 2020, the Bank has allotted 1,180,276 and 3,190,661 equity shares of ` 2 each, pursuant to the exercise of stock options by employees.

9

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.

10

On account of uncertainties arising from the COVID-19 pandemic across the world and in India, the extent to which the same will impact the Bank's operations and financial position will depend on various aspects including actions taken to mitigate its impact and other regulatory measures. The Bank's capital and liquidity position is strong and would continue to be the focus area for the Bank during this period.

As per the 'COVID-19 Regulatory Packages' announced by the RBI ('the RBI guidelines'), with regard to providing relief to borrowers' on account of COVID-19 pandemic, whose accounts were standard as on February 29, 2020, the Bank, in accordance with the Board approved policy had offered moratorium on repayment of loan instalments and/or deferment of interest due between March 1, 2020 and August 31, 2020, including relaxation in certain parameters, to all eligible borrowers, without considering the same as restructuring.

The Bank held a provision of ` 58,791.00 Lakhs as on September 30, 2020 against the likely impact of COVID-19, including the RBI mandated provision. During the current quarter, the bank has utilized ` 5,122.00 Lakhs from the above provision for creation of RBI mandated provision for advances restructured under "Resolution framework for COVID-19 related stress". Hence, the aggregate provision against the likely impact of COVID-19, including the RBI mandated provision, stands at ` 53,669.00 Lakhs as on December 31, 2020 and is grouped under 'Other liabilities and provisions' in the Balance sheet of the Bank.

The Honourable Supreme Court in a writ petition by Gajendra Sharma Vs Union of India & Anr vide its interim order dated September 3, 2020 has directed Banks that the accounts which were not declared Non performing asset (NPA) till August 31, 2020 shall not be declared NPA till further orders, pending disposal of the case by Supreme Court. Pursuant to the order, the Bank has not declared any account as NPA, which was not declared as NPA till August 31, 2020 as per the RBI Prudential norms on Income Recognition, Asset classification, and provisioning pertaining to advances. The Bank holds sufficient provisions in respect of these advances and as a prudent measure, the Bank has not recognized the unrealized interest on these accounts as income.

11

The figures for the quarter and nine months ended December 31, 2019 and year ended March 31, 2020 were reviewed / audited by previous statutory auditors.

12

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

 

 

 

 SHYAM SRINIVASAN

Kochi

 

 MANAGING DIRECTOR & CEO

January 20, 2021

 

 (DIN: 02274773)

 

Varma & Varma                                                                        Borkar & Muzumdar

Chartered Accountants,                                                            Chartered Accountants

No.53/2600, Kerala Varma Tower                                              Anand Nagar, Om Co-op

Off Kunjanbava Road,                                                               Hsg Society, Anand Nagar Lane

Vytilla,                                                                                        Off Nehru Road, Santacruz(East)

Kochi -682019                                                                           Mumbai - 400 055

 

 

 

Limited Review Report on consolidated unaudited financial results of The Federal Bank Limited for the quarter and nine months ended 31st December 2020, pursuant to the requirements of Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.

 

 

Review Report to

The Board of Directors,

The Federal Bank Limited

 

8.       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/loss after tax of its Associates for the quarter and nine months ended 31st December 2020 (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 consolidated Pillar 3 disclosure, as at 31st December 2020, 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 aforesaid Statement, which have not been reviewed by us.

 

9.       The Statement is the responsibility of the Bank's Management and has been approved by the Bank's Board of Directors. The Statement 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 (the 'RBI') from time to time (the 'RBI Guidelines'), SEBI circular CIR/CFD/FAC/62/2016 dated 5th July, 2016 (hereinafter referred to as the 'SEBI Circular'), and other accounting principles generally accepted in India. Our responsibility is to issue a report on the Statement based on our review.

 

10.     We conducted our review of the Statement 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 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.

 

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.

 

11.     Our review primarily is conducted on the basis of review of the books of account and records of the Bank. We have also relied on the information and explanations furnished to us by the Bank and the returns as considered necessary by us for the review.

 

12.     This Statement includes the results of the following entities:

a.    Fedbank Financial Services Limited (Subsidiary)

b.    Federal Operations and Services Limited (Subsidiary)

c.    IDBI Federal Life Insurance Company Limited (Associate)

d.    Equirus Capital Private Limited (Associate)

 

13.     Based on our review conducted and procedures performed as stated in Paragraphs 3 and 4 above and based on the consideration of the review reports of other auditors referred to in Paragraphs 7 and 8 below, nothing has come to our attention that causes us to believe that the accompanying Statement prepared in accordance with applicable accounting standards, the RBI Guidelines, the SEBI circular 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 (as amended) including the manner in which it is to be disclosed, except for the disclosures relating to consolidated Pillar 3 disclosure, as at 31st December 2020, 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 aforesaid Statement, which have not been reviewed by us, or that it contains any material misstatement.

 

 

14.     The statement of consolidated unaudited financial results includes the interim financial statements / financial information/ financial results of the two subsidiaries whose unaudited financial results reflects total revenues of Rs. Rs.18,787.82 Lakhs and Rs. Rs.51,728.57  Lakhs and total net profit after tax of Rs. Rs.1,557.70 Lakhs and Rs. Rs.3,799.38  Lakhs for the quarter and nine months ended 31st December 2020 respectively as considered in the consolidated unaudited financial results. These interim financial statements/financial information/ financial results have been reviewed by one of the Joint auditors of the Bank, 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 their reports and the procedures performed by us as stated in Paragraphs 3 and 4 above.

 

Our conclusion on the Statement is not modified in respect of this matter.

 

15.     The statement of consolidated unaudited financial results includes the Group's share of net loss after tax of Rs. 15.43  Lakhs and Rs. 64.98  Lakhs for the quarter and nine months ended 31st December, 2020 respectively as considered in the consolidated unaudited financial results in respect of one associate whose interim financial results have not been reviewed by us. These interim financial results have been reviewed by another auditor whose report has 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 the said associate, is based solely on the report of the other auditor and the procedures performed by us as stated in Paragraphs 3 and 4 above.

 

Our conclusion on the Statement is not modified in respect of this matter.

 

16.     The statement of consolidated unaudited financial results also includes the Group's share of net profit after tax of Rs. 256.31  lakhs and Rs. 636.26  lakhs for the quarter and nine months ended 31st December 2020 respectively as considered in the consolidated unaudited financial results in respect of one associate, 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 interim financial statements / financial information / financial results are not material to the Group.

 

Our conclusion on the Statement is not modified in respect of this matter.

 

17.     We draw attention to Note No.11 of the accompanying Statement, regarding the impact of COVID-19 pandemic and adjustments made in the accounts for the quarter and nine months ended 31st December, 2020 on account of the same. As stated therein, in view of continuing uncertainties, the extent of impact of the pandemic on the Bank's operations and financial position would depend on various aspects, including actions taken to mitigate its impact and other regulatory measures. 

 

Our conclusion on the Statement is not modified in respect of this matter.

 

18.     The  review of unaudited quarterly and nine month financial results for the  quarter and nine months ended 31st December 2019 and audit of financial results for the year ended 31st  March 2020 included in the Statement were carried out and reported by predecessor auditors who have expressed unmodified conclusion vide review reports dated 20th January, 2020 for the period ended 31st December, 2019 and unmodified opinion vide audit report dated 28th May, 2020, whose reports have been furnished to us and which have been relied upon by us for the purpose of our review of the Statement.

 

Our conclusion on the Statement is not modified in respect of this matter.

 

 

For Varma & Varma                                                       For Borkar & Muzumdar

Chartered Accountants                                                  Chartered Accountants

FRN:004532S                                                                FRN:101569W

                                                                                               

 

 

R Rajasekharan                                                             Devang Vaghani

Partner                                                                           Partner

M. No. 22703                                                                 M. No. 109386

UDIN:   21022703AAAAAC1906                                   UDIN: 21109386AAAAAX7593

 

Kochi-19                                                                         Mumbai-55

20th January 2021                                                          20th January 2021

 

 

 

 

 

 

 

 

 

 

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, 2020

 

 

 

 

 

 

 

 (` in Lakhs)

Particulars

Quarter ended

Nine months ended

Year ended

31.12.2020

30.09.2020

31.12.2019

31.12.2020

31.12.2019

31.03.2020

Unaudited

Unaudited

Unaudited

 Unaudited

Unaudited

Audited

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

       360,423

       362,188

       341,395

        1,079,822

    1,004,591

    1,359,039

(a)

Interest/discount on advances/bills

       286,093

       285,376

       278,601

           854,243

       817,740

    1,104,518

(b)

Income on investments

         56,781

         59,284

         53,647

           176,719

       161,990

       218,550

(c)

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

         11,469

         11,661

           3,527

             30,197

           9,310

         13,996

(d)

Others

           6,080

           5,867

           5,620

             18,663

         15,551

         21,975

2. Other income

         48,454

         50,944

         42,076

           147,729

       120,342

       188,181

3. TOTAL INCOME (1+2)

     408,877

     413,132

     383,471

      1,227,551

  1,124,933

  1,547,220

4. Interest expended

       207,579

       215,941

       220,564

           643,175

       645,694

       867,831

5. Operating expenses (i)+(ii)

       101,078

         92,710

         86,872

           283,383

       252,254

       354,670

(i)

Employees cost

         56,210

         52,136

         44,365

           161,002

       132,227

       187,598

(ii)

Other operating expenses

         44,868

         40,574

         42,507

           122,381

       120,027

       167,072

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

     308,657

     308,651

     307,436

         926,558

     897,948

  1,222,501

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

     100,220

     104,481

       76,035

         300,993

     226,985

     324,719

8. Provisions (other than tax) and contingencies

         43,934

         62,543

         16,254

           147,412

         60,928

       118,722

9. Exceptional items

 

                 -  

                 -  

                 -  

                     -  

                 -  

                 -  

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

       56,286

       41,938

       59,781

         153,581

     166,057

     205,997

11. Tax expense

 

         14,319

         10,368

         14,609

             38,886

         41,075

         50,720

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

       41,967

       31,570

       45,172

         114,695

     124,982

     155,277

13. Extraordinary items (net of tax expense)

 

                 -  

                 -  

                 -  

                     -  

                 -  

                 -  

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

 

       41,967

       31,570

       45,172

         114,695

     124,982

     155,277

15. Minority interest

 

              394

              199

              280

                  957

              591

           1,028

16. Share in Profit of Associates

 

              241

              174

              270

                  571

              725

           3,771

17. Consolidated Net Profit of the group
(14-15+16)

       41,814

       31,545

       45,162

         114,309

     125,116

     158,020

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

         39,917

         39,893

         39,846

             39,917

         39,846

         39,853

19. Reserves excluding Revaluation Reserve

 

 

 

 

 

    1,441,882

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

           14.63

           15.19

           13.88

               14.63

           13.88

           14.63

(iii)

Earnings per Share (EPS) (in `)

 

 

 

 

 

 

 

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

2.10*

1.58*

2.27*

 5.73*

 6.29*

             7.94

 

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

2.09*

1.58*

2.26*

 5.72*

 6.26*

             7.88

(iv)

NPA Ratios

 

 

 

 

 

 

 

a) Gross NPA

       350,521

       359,172

       365,657

           350,521

       365,657

       358,015

 

b) Net NPA

         78,449

       124,985

       197,379

             78,449

       197,379

       164,953

 

c) % of Gross NPA

             2.67

             2.80

             2.97

                 2.67

             2.97

             2.82

 

d) % of Net NPA

             0.61

             0.99

             1.63

                 0.61

             1.63

             1.32

(v)

Return on Assets (%)

0.21*

0.17*

 0.26*

 0.60*

 0.75*

             0.92

* Not Annualised

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Segment Information@

 

 

 

 

 

 

 

 

 

 

 

 

 

 (` in Lakhs)

Particulars

Quarter ended

Nine months ended

Year ended

31.12.2020

30.09.2020

31.12.2019

31.12.2020

31.12.2019

31.03.2020

Unaudited

Unaudited

Unaudited

Unaudited

Unaudited

Audited

Segment Revenue:

 

 

 

 

 

 

 

Treasury

             61,412

             60,827

             42,497

           216,021

           156,189

           223,796

 

Corporate/Wholesale Banking

           103,742

           130,786

           122,589

           349,470

           368,790

           486,614

 

Retail Banking

           243,723

           221,519

           218,385

           662,060

           599,954

           836,810

 

Other Banking operations

                     -  

                     -  

                     -  

                     -  

                     -  

                     -  

 

Unallocated

                     -  

                     -  

                     -  

                     -  

                     -  

                     -  

 

Total Revenue

         408,877

         413,132

         383,471

      1,227,551

      1,124,933

      1,547,220

 

Less: Inter Segment Revenue

                     -  

                     -  

                     -  

                     -  

                     -  

                     -  

 

Income from Operations

         408,877

         413,132

         383,471

      1,227,551

      1,124,933

      1,547,220

Segment Results (net of provisions):

 

 

 

 

 

 

 

Treasury

             12,395

               4,234

               1,197

             58,904

             24,380

             38,436

 

Corporate/Wholesale Banking

              (2,197)

             15,493

               6,387

               5,258

             35,967

             18,421

 

Retail Banking

             46,086

             22,211

             52,437

             89,419

           105,950

           149,576

 

Other Banking operations

                     -  

                     -  

                     -  

                     -  

                     -  

                     -  

 

Unallocated

                      2

                     -  

                (240)

                     -  

                (240)

                 (436)

 

Profit before tax

            56,286

            41,938

           59,781

         153,581

         166,057

         205,997

Segment Assets

 

 

 

 

 

 

 

 

Treasury

        4,480,398

        4,332,971

        3,300,778

        4,480,398

        3,300,778

        3,765,464

 

Corporate/Wholesale Banking

        6,608,639

        6,742,587

        6,902,969

        6,608,639

        6,902,969

        6,997,531

 

Retail Banking

        7,864,126

        7,330,321

        6,529,866

        7,864,126

        6,529,866

        6,832,986

 

Other Banking operations

                     -  

                     -  

                     -  

                     -  

                     -  

                     -  

 

Unallocated

        1,070,904

           777,293

           754,989

        1,070,904

           754,989

           739,352

 

Total

    20,024,067

    19,183,172

   17,488,602

   20,024,067

   17,488,602

    18,335,333

Segment Liabilities

 

 

 

 

 

 

 

 

Treasury

        1,361,413

        1,298,917

        1,136,410

        1,361,413

        1,136,410

        1,626,174

 

Corporate/Wholesale Banking

        1,502,304

        1,417,520

        1,040,060

        1,502,304

        1,040,060

        1,291,143

 

Retail Banking

      15,344,065

      14,686,523

      13,660,971

      15,344,065

      13,660,971

      13,649,598

 

Other Banking operations

                     -  

                     -  

                     -  

                     -  

                     -  

                     -  

 

Unallocated

           197,146

           205,895

           186,739

           197,146

           186,739

           268,086

 

Total

    18,404,928

    17,608,855

   16,024,180

   18,404,928

   16,024,180

    16,835,001

Capital employed:

 

 

 

 

 

 

(Segment Assets - Segment Liabilities)

 

 

 

 

 

 

 

Treasury

        3,118,985

        3,034,054

        2,164,368

        3,118,985

        2,164,368

        2,139,290

 

Corporate/Wholesale Banking

        5,106,335

        5,325,067

        5,862,909

        5,106,335

        5,862,909

        5,706,388

 

Retail Banking

       (7,479,939)

       (7,356,202)

      (7,131,105)

      (7,479,939)

      (7,131,105)

       (6,816,612)

 

Other Banking operations

                     -  

                     -  

                     -  

                     -  

                     -  

                     -  

 

Unallocated

           873,758

           571,398

           568,250

           873,758

           568,250

           471,266

 

Total

      1,619,139

      1,574,317

      1,464,422

      1,619,139

      1,464,422

      1,500,332

@

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:

 

 

 

 

 

 

1

The above Consolidated Unaudited Financial Results for the nine months ended December 31, 2020 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, 2021. 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 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 nine months ended December 31, 2020 as compared to those followed for the year ended March 31, 2020.

 

 

 

 

 

 

 

 

4

Pursuant to Board approved policy on preparation of segment information, the Bank, with effect from quarter ended June 30, 2020, has revised the basis of preparation of segment information on a direct identification basis with the aid of Internal Transfer pricing mechanism for more appropriate presentation of the segment results. Accordingly, figures for the previous periods have been regrouped / reclassified to conform to current period's classification. 

The change in segment information has no impact on the overall Revenue, Results, and Capital employed of the bank for the quarter and nine months ended December 31, 2020 or the previous periods/year.

 

 

 

 

 

 

 

 

5

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.

 

 

 

 

 

 

 

 

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

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 nine months ended December 31, 2020, the Bank has allotted 1,180,276 and 3,190,661 equity shares of ` 2 each, pursuant to the exercise of stock options by employees.

 

 

 

 

 

 

 

 

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.

 

 

 

 

 

 

 

 

11

On account of uncertainties arising from the COVID-19 pandemic across the world and in India, the extent to which the same will impact the Bank's operations and financial position will depend on various aspects including actions taken to mitigate its impact and other regulatory measures. The Bank's capital and liquidity position is strong and would continue to be the focus area for the Bank during this period.

As per the 'COVID-19 Regulatory Packages' announced by the RBI ('the RBI guidelines'), with regard to providing relief to borrowers' on account of COVID-19 pandemic, whose accounts were standard as on February 29, 2020, the Bank, in accordance with the Board approved policy had offered moratorium on repayment of loan instalments and/or deferment of interest due between March 1, 2020 and August 31, 2020, including relaxation in certain parameters, to all eligible borrowers, without considering the same as restructuring.

The Bank held a provision of ` 58,791.00 Lakhs as on September 30, 2020 against the likely impact of COVID-19, including the RBI mandated provision. During the current quarter, the bank has utilized ` 5,122.00 Lakhs from the above provision for creation of RBI mandated provision for advances restructured under "Resolution framework for COVID-19 related stress". Hence, the aggregate provision against the likely impact of COVID-19, including the RBI mandated provision, stands at ` 53,669.00 Lakhs as on December 31, 2020 and is grouped under 'Other liabilities and provisions' in the Balance sheet of the Bank.

The Honourable Supreme Court in a writ petition by Gajendra Sharma Vs Union of India & Anr vide its interim order dated September 3, 2020 has directed Banks that the accounts which were not declared Non performing asset (NPA) till August 31, 2020 shall not be declared NPA till further orders, pending disposal of the case by Supreme Court. Pursuant to the order, the Bank has not declared any account as NPA, which was not declared as NPA till August 31, 2020 as per the RBI Prudential norms on Income Recognition, Asset classification, and provisioning pertaining to advances. The Bank holds sufficient provisions in respect of these advances and as a prudent measure, the Bank has not recognized the unrealized interest on these accounts as income.

 

 

 

 

 

 

 

 

12

The figures for the quarter and nine months ended December 31, 2019 and year ended March 31, 2020 were reviewed / audited by previous statutory auditors.

 

 

 

 

 

 

 

 

13

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 SHYAM SRINIVASAN

Kochi

 

 MANAGING DIRECTOR & CEO

January 20, 2021

 

 (DIN: 02274773)

 

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