Last checked at 6 Feb 2017 07:00
SDF-24/ /2016-17 04th February 2017
To,
The London Stock Exchange
Dear Sir,
We enclose herewith the Un-Audited Financial Results of the Bank for the period ended December 31, 2016 which was approved at the Bank's Board of Directors meeting held on 19th January 2017.
Kindly take the same on your record.
For The Federal Bank Limited
Girish Kumar G
COMPANY SECRETARY
BSR&Co. LLP | M.M. Nissim & Co. |
Chartered Accountants | Chartered Accountants |
5th Floor, Lodha Excelus | Barodawala Mansion, B-Wing, |
Apollo Mills Compound | 3rd Floor, 81, |
N.M. Joshi Marg, Mahalaxmi | Dr. Annie Besant Road, |
Mumbai- 400 011 | Worli, Mumbai- 400 018 |
Limited Review Report on Quarterly Standalone Financial Results of The Federal Bank Limited pursuant to the Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015
To the Board of Directors of
The Federal Bank Limited
1. We have reviewed the accompanying Statement of Unaudited Standalone Financial Results ('the Statement') of The Federal Bank Limited ('the Bank') for the quarter and nine months ended 31 December 2016, attached herewith, being submitted by the Bank pursuant to the requirement of Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, except for the disclosures relating to 'consolidated Pillar 3 disclosure as at 31 December 2016, including leverage ratio and liquidity coverage ratio under Basel III Capital Regulations' as have been disclosed on the Bank's website and in respect of which a link has been provided in the standalone quarterly financial results and have not been reviewed by us.
2. This Statement is the responsibility of the Bank's management and has been approved by the Board of Directors of the Bank in their meeting held on 19 January 2017. Our responsibility is to issue a report on the Statement based on our review. The financial results for all periods prior to the quarter ended 30 September 2016, included in the statement were reviewed or audited earlier by Deloitte Haskins & Sells, Chartered Accountants, and by M P Chitale& Co., Chartered Accountants, the then joint statutory auditors of the Bank, whose reports have been furnished to the current joint auditors M.M. Nissim & Co., Chartered Accountants, and B S R & Co. LLP, and which have been relied upon for the purpose of the joint review of the Statement.
3. We conducted our review in accordance with the Standard on Review Engagement (SRE) 2410,"Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Institute of Chartered Accountants of India. This standard requires that we plan and perform the review to obtain moderate assurance as to whether the Statement is free of material misstatement. A review is limited primarily to inquiries of the Bank's personnel and analytical procedures applied to financial data and thus provides less assurance than an audit. We have not performed an audit and accordingly, we do not express an audit opinion.
4. The Financial results incorporate the relevant returns of 100 Branches and Treasury Branch reviewed by either of us and un-reviewed returns in respect of 1177 branches. These Branches cover 57.68% of the advances portfolio (excluding outstanding of asset recovery branches and food credit advance) of the Bank and 60.68% of non-performing advances of the bank.
5. Without qualifying our conclusion, we draw attention to Note No. 6 regarding deferment of shortfall arising from the sale of certain non-performing assets during the year ended 31 March 2016 in terms of RBI Master Circular DBR.No.BP.BC.2/21.04.048/2015-16 - Prudential Norms on Income Recognition, Asset Classification and Provisioning pertaining to Advances, dated July 1, 2015, as amended and the unamortized balance as at 31 December 2016 of Rs. 2,168.29 lakhs.
6. Based on our review conducted as mentioned in paragraphs 3and 4 above, nothing has come to our attention that causes us to believe that the accompanying Statement prepared in accordance with applicable accounting standards specified under section 133 of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014 and other recognized accounting practices and policies has not disclosed the information required to be disclosed in terms of Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 including the manner in which it is to be disclosed, or that it contains any material misstatement or that it has not been prepared in accordance with the relevant prudential norms issued by the Reserve Bank of India in respect of income recognition, asset classification, provisioning and other related matters.
For B S R & Co. LLP | For M.M. Nissim & Co. |
Chartered Accountants | Chartered Accountants |
Firm's Registration No: 101248W / W-100022 | Firm's Registration No: 107122W |
Akeel Master | Sanjay Khemani |
Partner | Partner |
Membership No: 046768 | Membership No:044577 |
Mumbai | Mumbai |
19 January 2017 | 19 January 2017 |
THE FEDERAL BANK LIMITED | ||||||||||||||
REGD.OFFICE: P.B.NO. 103, FEDERAL TOWERS, ALUVA-683101 | ||||||||||||||
(CIN: L65191KL1931PLC000368) | ||||||||||||||
STANDALONE UNAUDITED FINANCIAL RESULTS FOR THE QUARTER AND NINE MONTHS ENDED DECEMBER 31, 2016 | ||||||||||||||
(` in Lakhs) | ||||||||||||||
Particulars | Quarter ended | Nine Months ended | Year ended 31.03.2016 | |||||||||||
31.12.2016 | 30.09.2016 | 31.12.2015 | 31.12.2016 | 31.12.2015 | ||||||||||
Unaudited | Unaudited | Unaudited | Unaudited | Unaudited | Audited | |||||||||
1. Interest earned (a)+(b)+(c)+(d) | 2,28,142 | 2,06,625 | 1,90,325 | 6,36,144 | 5,72,149 | 7,74,815 | ||||||||
(a) | Interest/discount on advances/bills | 1,71,622 | 1,56,880 | 1,38,554 | 4,80,924 | 4,19,982 | 5,66,931 | |||||||
(b) | Income on Investments | 45,122 | 43,552 | 44,638 | 1,31,758 | 1,30,314 | 1,76,309 | |||||||
(c) | Interest on balances with Reserve Bank of India and other inter bank funds | 3,494 | 1,585 | 1,657 | 6,295 | 4,871 | 5,596 | |||||||
(d) | Others | 7,904 | 4,608 | 5,476 | 17,167 | 16,982 | 25,979 | |||||||
2. Other Income | 26,333 | 26,154 | 18,282 | 76,191 | 55,620 | 78,292 | ||||||||
3. TOTAL INCOME (1+2) | 2,54,475 | 2,32,779 | 2,08,607 | 7,12,335 | 6,27,769 | 8,53,107 | ||||||||
4. Interest expended | 1,49,003 | 1,34,006 | 1,29,756 | 4,15,119 | 3,89,987 | 5,24,045 | ||||||||
5. Operating Expenses (i)+(ii) | 57,982 | 51,280 | 46,303 | 1,59,647 | 1,34,856 | 1,86,684 | ||||||||
(i) | Employees Cost | 31,972 | 29,159 | 25,859 | 90,072 | 75,981 | 1,05,285 | |||||||
(ii) | Other operating expenses | 26,010 | 22,121 | 20,444 | 69,575 | 58,875 | 81,399 | |||||||
6. TOTAL EXPENDITURE (4+5)(excluding Provisions and Contingencies) | 2,06,985 | 1,85,286 | 1,76,059 | 5,74,766 | 5,24,843 | 7,10,729 | ||||||||
7. OPERATING PROFIT (3-6) (Profit before Provisions and Contingencies) | 47,490 | 47,493 | 32,548 | 1,37,569 | 1,02,926 | 1,42,378 | ||||||||
8. Provisions (other than Tax) and Contingencies | 15,882 | 16,840 | 7,511 | 49,570 | 31,549 | 70,413 | ||||||||
9. Exceptional Items | - | - | - | - | - | - | ||||||||
10. Profit from Ordinary Activities before tax (7-8-9) | 31,608 | 30,653 | 25,037 | 87,999 | 71,377 | 71,965 | ||||||||
11. Tax expense | 11,043 | 10,529 | 8,765 | 30,579 | 24,838 | 24,400 | ||||||||
12. Net Profit from Ordinary Activities after tax (10-11) | 20,565 | 20,124 | 16,272 | 57,420 | 46,539 | 47,565 | ||||||||
13. Extraordinary items (net of tax expense) | - | - | - | - | - | - | ||||||||
14. Net Profit for the period (12-13) | 20,565 | 20,124 | 16,272 | 57,420 | 46,539 | 47,565 | ||||||||
15. Paid-up Equity Share Capital(Face value ` 2/- per Equity Share) | 34,443 | 34,410 | 34,367 | 34,443 | 34,367 | 34,379 | ||||||||
16. Reserves excluding Revaluation Reserve | 7,74,242 | |||||||||||||
17. Analytical Ratios | ||||||||||||||
(i) | Percentage of shares held by Government of India | NIL | NIL | NIL | NIL | NIL | NIL | |||||||
(ii) | Capital Adequacy ratio (%) | |||||||||||||
Under Basel III | 12.28 | 12.85 | 14.32 | 12.28 | 14.32 | 13.93 | ||||||||
(iii) | Earnings per Share (EPS) (in `) | |||||||||||||
(a) Basic EPS (before and after Extra ordinary Items) | 1.20* | 1.17* | 0.95* | 3.34* | 2.71* | 2.77 | ||||||||
(b) Diluted EPS (before and after Extra ordinary Items) | 1.18* | 1.15* | 0.94* | 3.29* | 2.68* | 2.75 | ||||||||
(iv) | NPA Ratios | |||||||||||||
a) Gross NPA | 1,95,155 | 1,81,972 | 1,68,411 | 1,95,155 | 1,68,411 | 1,66,777 | ||||||||
b) Net NPA | 1,10,237 | 1,03,974 | 87,610 | 1,10,237 | 87,610 | 95,001 | ||||||||
c) % of Gross NPA | 2.77 | 2.78 | 3.15 | 2.77 | 3.15 | 2.84 | ||||||||
d) % of Net NPA | 1.58 | 1.61 | 1.66 | 1.58 | 1.66 | 1.64 | ||||||||
(v) | Return on Assets (%) | 0.2 * | 0.22* | 0.19* | 0.6* | 0.56* | 0.57 | |||||||
* Not Annualised | ||||||||||||||
Segment Information@ | ||||||||||||||
(` in Lakhs) |
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Particulars | Quarter ended | Nine Months ended | Year ended 31.03.2016 |
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31.12.2016 | 30.09.2016 | 31.12.2015 | 31.12.2016 | 31.12.2015 |
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Unaudited | Unaudited | Unaudited | Unaudited | Unaudited | Audited |
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Segment Revenue: |
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Treasury | 65,168 | 61,233 | 55,321 | 1,85,968 | 1,69,001 | 2,28,193 |
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Corporate/Wholesale Banking | 75,059 | 69,657 | 56,861 | 2,16,606 | 1,68,392 | 2,36,094 |
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Retail Banking | 1,10,117 | 1,00,740 | 95,416 | 3,02,978 | 2,88,176 | 3,80,964 |
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Other Banking operations | 4,131 | 1,149 | 1,009 | 6,783 | 2,200 | 7,856 |
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Unallocated | - | - | - | - | - | - |
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Total Revenue | 2,54,475 | 2,32,779 | 2,08,607 | 7,12,335 | 6,27,769 | 8,53,107 |
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Less: Inter Segment Revenue | - | - | - | - | - | - |
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Income from Operations | 2,54,475 | 2,32,779 | 2,08,607 | 7,12,335 | 6,27,769 | 8,53,107 |
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Segment Results (net of provisions): |
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Treasury | 8,779 | 10,954 | 2,721 | 32,558 | 12,679 | 15,852 |
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Corporate/Wholesale Banking | 2,249 | 2,012 | 2,936 | 7,597 | 7,138 | 1,814 |
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Retail Banking | 19,035 | 17,533 | 19,280 | 45,588 | 51,521 | 49,459 |
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Other Banking operations | 2,386 | 1,016 | 914 | 4,347 | 1,854 | 7,385 |
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Unallocated | (841) | (862) | (814) | (2,091) | (1,815) | (2,545) |
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Profit before tax | 31,608 | 30,653 | 25,037 | 87,999 | 71,377 | 71,965 |
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Segment Assets |
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Treasury | 38,13,929 | 32,64,602 | 32,72,465 | 38,13,929 | 32,72,465 | 33,34,198 |
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Corporate/Wholesale Banking | 34,00,648 | 28,94,267 | 21,43,600 | 34,00,648 | 21,43,600 | 24,83,667 |
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Retail Banking | 36,45,243 | 36,24,006 | 31,84,203 | 36,45,243 | 31,84,203 | 33,71,086 |
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Other Banking operations | 4,398 | 539 | 7,070 | 4,398 | 7,070 | 2,656 |
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Unallocated | 2,85,520 | 2,64,176 | 2,67,501 | 2,85,520 | 2,67,501 | 2,45,196 |
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Total | 1,11,49,738 | 1,00,47,590 | 88,74,839 | 1,11,49,738 | 88,74,839 | 94,36,803 |
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Segment Liabilities |
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Treasury | 35,10,701 | 29,69,932 | 29,30,621 | 35,10,701 | 29,30,621 | 30,67,275 |
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Corporate/Wholesale Banking | 32,59,778 | 27,45,722 | 20,43,520 | 32,59,778 | 20,43,520 | 23,37,684 |
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Retail Banking | 35,00,018 | 34,43,998 | 30,40,948 | 35,00,018 | 30,40,948 | 31,78,818 |
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Other Banking operations | - | - | - | - | - | - |
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Unallocated | 11,396 | 41,358 | 37,383 | 11,396 | 37,383 | 43,904 |
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Total | 1,02,81,893 | 92,01,010 | 80,52,472 | 1,02,81,893 | 80,52,472 | 86,27,681 |
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Capital employed: |
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(Segment Assets - Segment Liabilities) |
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Treasury | 3,03,228 | 2,94,670 | 3,41,844 | 3,03,228 | 3,41,844 | 2,66,923 |
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Corporate/Wholesale Banking | 1,40,870 | 1,48,545 | 1,00,080 | 1,40,870 | 1,00,080 | 1,45,983 |
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Retail Banking | 1,45,225 | 1,80,008 | 1,43,255 | 1,45,225 | 1,43,255 | 1,92,268 |
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Other Banking operations | 4,398 | 539 | 7,070 | 4,398 | 7,070 | 2,656 |
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Unallocated | 2,74,124 | 2,22,818 | 2,30,118 | 2,74,124 | 2,30,118 | 2,01,292 |
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Total | 8,67,845 | 8,46,580 | 8,22,367 | 8,67,845 | 8,22,367 | 8,09,122 |
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@ | For the above segment reporting, the reportable segments are identified into Treasury, Corporate/Wholesale Banking, Retail Banking and Other Banking Operations in compliance with the RBI guidelines. |
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Notes: |
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1 | The above Standalone Unaudited Financial Results for the quarter ended December 31, 2016 were reviewed by the Audit Committee and approved by the Board of Directors at its meeting held on January 19, 2017. These Results have been subjected to "Limited Review" by the Statutory Central Auditors of the Bank and an unmodified review report has been issued.
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2 | The Bank has made provision for Non Performing Assets as stipulated under Reserve Bank of India (RBI) norms. Further, provision for standard assets including requirements for exposures to entities with Unhedged Foreign Currency Exposures and provision for restructured advances have been made as per RBI guidelines. |
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3 | The Bank has followed the same significant accounting policies in the preparation of the interim financial statements as those followed in the annual financial statements for the year ended March 31, 2016. |
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4 | In accordance with RBI Circular DBR.No.BP.BC.1/21.06.201/2015-16 on Basel III Capital Regulations dated July 01, 2015 and RBI Circular DBR.No.BP.BC.80/21.06.201/2014-15 dated March 31, 2015 - 'Prudential Guidelines on Capital Adequacy and Liquidity Standards - amendments', Banks are required to make Pillar 3 disclosure requirements including Leverage Ratio disclosure requirements that are to be made along with the publication of Financial Results. Accordingly, such applicable disclosures have been placed on the website of the Bank which can be accessed at the following link: http://www.federalbank.co.in/regulatory-disclosures. These disclosures have not been subjected to review by the Statutory Central Auditors of the Bank. |
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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. |
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6 | During the year ended March 31,2016, the Bank had assigned certain Non performing financial assets to Asset Reconstruction Companies. In terms of RBI Master Circular DBR.No.BP.BC.2/21.04.048/2015-16 - Prudential norms on Income Recognition, Asset Classification and Provisioning pertaining to Advances dated July 1, 2015, as amended, the shortfall arrived at by deducting sale consideration from the net book value of the financial assets, is amortised over a period of two years. Accordingly, the bank has charged to the profit and loss account an amount of ` 2,168.29 Lakhs and ` 6,504.87 Lakhs for the Quarter and nine months ended December 31,2016 respectively and the unamortised balance carried forward as on December 31,2016 is ` 2,168.29 Lakhs, to be amortised in the next quarter. |
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7 | During the quarter and nine months ended December 31,2016, the Bank allotted 16,60,996 and 31,95,761 Equity Shares respectively, pursuant to the exercise of stock options by certain employees. |
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8 | Pursuant to RBI Circular FMRD.DIRD.10/14.03.002/2015-16 dated May 19, 2016, as amended, the bank has with effect from October 3, 2016 considered its repo/reverse repo transactions under Liquidity Adjustment Facility (LAF) and Marginal Standing Facility (MSF) of RBI as Borrowings/Lendings, as the case may be. Hitherto, the repo/ reverse repo transactions were included under Investments. Figures for the previous periods have been regrouped / reclassified to conform to current period's classification. The above regrouping / reclassification has no impact on the profit of the bank for the quarter / Nine months ended December 31, 2016 or the previous periods/year. |
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9 | The figures for the quarter and nine months ended December 31,2015 and year ended March 31,2016 were reviewed / audited by previous statutory auditors. |
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10 | 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 19, 2017 | (DIN: 02274773) |
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