Last checked at 20 Oct 2017 08:35
SDF-24/ /2017-18 20th October 2017
To,
The London Stock Exchange
Dear Sir,
We enclose herewith the Un-Audited Financial Results of the Bank for the period ended September 30, 2017 which was approved at the Bank's Board of Directors meeting held on 16th October 2017.
Kindly take the same on your record.
For The Federal Bank Limited
Girish Kumar G
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 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 ended 30 September 2017 and year to date results for the period 1 April 2017 to 30 September 2017. This Statement has been prepared by the Bank pursuant to Regulation 33 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, except for the disclosures relating to consolidated Pillar 3 disclosure as at 30 September 2017, 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 its meeting held on 16 October 2017. Our responsibility is to issue a report on the Statement based on our review.
3. We conducted our review in accordance with the Standard on Review Engagement (SRE) 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" 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 297 Branches and Treasury Branch reviewed by either of us and un-reviewed returns in respect of 955 branches. These Branches cover 50.76% of the advances portfolio (excluding outstanding of asset recovery branches and food credit advance) of the Bank and 85.72% of non-performing advances of the Bank.
5. Based on our review conducted as mentioned in paragraphs 3 and 4 above, nothing has come to our attention that causes us to believe that the accompanying Statement prepared in accordance with applicable accounting standards specified under Section 133 of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014 and other recognized accounting practices and policies has not disclosed the information required to be disclosed in terms of Regulation 33 of the Securities and Exchange Board of India (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 |
16 October 2017 |
16 October 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 HALF YEAR ENDED SEPTEMBER 30, 2017 | |||||||
|
|
|
|
|
|
| (` in Lakhs) |
Particulars | Quarter ended | Half year ended | Year ended 31.03.2017 | ||||
30.09.2017 | 30.06.2017 | 30.09.2016 | 30.09.2017 | 30.09.2016 | |||
Unaudited | Unaudited | Unaudited | Unaudited | Unaudited | Audited | ||
1. Interest earned (a)+(b)+(c)+(d) | 237,960 | 232,409 | 206,625 | 470,369 | 408,002 | 867,739 | |
(a) | Interest/discount on advances/bills | 185,900 | 178,775 | 156,880 | 364,675 | 309,302 | 654,568 |
(b) | Income on investments | 45,000 | 46,829 | 43,552 | 91,829 | 86,636 | 180,140 |
(c) | Interest on balances with Reserve Bank of India and other inter bank funds | 2,586 | 2,367 | 1,585 | 4,953 | 2,801 | 9,893 |
(d) | Others | 4,474 | 4,438 | 4,608 | 8,912 | 9,263 | 23,138 |
2. Other income | 28,722 | 32,910 | 27,207 | 61,632 | 52,214 | 108,181 | |
3. TOTAL INCOME (1+2) | 266,682 | 265,319 | 233,832 | 532,001 | 460,216 | 975,920 | |
4. Interest expended | 148,069 | 152,342 | 134,006 | 300,411 | 266,116 | 562,475 | |
5. Operating expenses (i)+(ii) | 60,292 | 57,192 | 52,333 | 117,484 | 104,021 | 220,954 | |
(i) | Employees cost | 31,274 | 29,845 | 29,159 | 61,119 | 58,100 | 116,375 |
(ii) | Other operating expenses | 29,018 | 27,347 | 23,174 | 56,365 | 45,921 | 104,579 |
6. TOTAL EXPENDITURE (4+5)(excluding provisions and contingencies) | 208,361 | 209,534 | 186,339 | 417,895 | 370,137 | 783,429 | |
7. OPERATING PROFIT (3-6) (Profit before provisions and contingencies) | 58,321 | 55,785 | 47,493 | 114,106 | 90,079 | 192,491 | |
8. Provisions (other than tax) and contingencies | 17,677 | 23,644 | 16,840 | 41,321 | 33,688 | 61,841 | |
9. Exceptional items |
| - | - | - | - | - | - |
10. Profit from Ordinary Activities before tax(7-8-9) | 40,644 | 32,141 | 30,653 | 72,785 | 56,391 | 130,650 | |
11. Tax expense |
| 14,274 | 11,126 | 10,529 | 25,400 | 19,536 | 47,571 |
12. Net Profit from Ordinary Activities after tax (10-11) | 26,370 | 21,015 | 20,124 | 47,385 | 36,855 | 83,079 | |
13. Extraordinary items (net of tax expense) |
| - | - | - | - | - | - |
14. Net Profit for the period (12-13) |
| 26,370 | 21,015 | 20,124 | 47,385 | 36,855 | 83,079 |
15. Paid-up Equity Share Capital(Face value ` 2/- per Equity Share) | 39,091 | 38,846 | 34,410 | 39,091 | 34,410 | 34,481 | |
16. Reserves excluding Revaluation Reserve |
|
|
|
|
| 859,256 | |
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 | 14.63 | 15.28 | 12.85 | 14.63 | 12.85 | 12.39 |
(iii) | Earnings per Share (EPS) (in `) |
|
|
|
|
|
|
| (a) Basic EPS (before and after extra ordinary items) | 1.35* | 1.21* | 1.17* | 2.58* | 2.14* | 4.83 |
| (b) Diluted EPS (before and after extra ordinary items) | 1.33* | 1.19* | 1.15* | 2.53* | 2.12* | 4.76 |
(iv) | NPA Ratios |
|
|
|
|
|
|
| a) Gross NPA | 194,897 | 186,794 | 181,972 | 194,897 | 181,972 | 172,705 |
| b) Net NPA | 106,638 | 106,126 | 103,974 | 106,638 | 103,974 | 94,120 |
| c) % of Gross NPA | 2.39 | 2.42 | 2.78 | 2.39 | 2.78 | 2.33 |
| d) % of Net NPA | 1.32 | 1.39 | 1.61 | 1.32 | 1.61 | 1.28 |
(v) | Return on Assets (%) | 0.24 * | 0.19 * | 0.22* | 0.43 * | 0.41* | 0.84 |
|
|
|
|
|
|
|
|
* Not Annualised |
|
|
|
|
|
| |
Segment Information@ |
|
|
|
|
|
| |
|
|
|
|
|
|
| (` in Lakhs) |
Particulars | Quarter ended | Half year ended | Year ended 31.03.2017 | ||||
30.09.2017 | 30.06.2017 | 30.09.2016 | 30.09.2017 | 30.09.2016 | |||
Unaudited | Unaudited | Unaudited | Unaudited | Unaudited | Audited | ||
Segment Revenue: |
|
|
|
|
|
| |
| Treasury | 58,686 | 63,776 | 56,757 | 122,462 | 111,851 | 231,601 |
| Corporate/Wholesale Banking | 94,157 | 90,641 | 71,193 | 184,798 | 144,816 | 307,150 |
| Retail Banking | 109,591 | 106,978 | 102,530 | 216,569 | 196,736 | 417,952 |
| Other Banking operations | 4,248 | 3,924 | 3,352 | 8,172 | 6,813 | 19,217 |
| Unallocated | - | - | - | - | - | - |
| Total Revenue | 266,682 | 265,319 | 233,832 | 532,001 | 460,216 | 975,920 |
| Less: Inter Segment Revenue | - | - | - | - | - | - |
| Income from Operations | 266,682 | 265,319 | 233,832 | 532,001 | 460,216 | 975,920 |
Segment Results (net of provisions): |
|
|
|
|
|
| |
| Treasury | 10,902 | 12,740 | 10,798 | 23,642 | 23,191 | 38,816 |
| Corporate/Wholesale Banking | 6,405 | (1,822) | (1,825) | 4,583 | (1,570) | 8,250 |
| Retail Banking | 22,789 | 20,825 | 20,377 | 43,614 | 32,255 | 76,938 |
| Other Banking operations | 1,047 | 890 | 2,165 | 1,937 | 3,765 | 9,553 |
| Unallocated | (499) | (492) | (862) | (991) | (1,250) | (2,907) |
| Profit before tax | 40,644 | 32,141 | 30,653 | 72,785 | 56,391 | 130,650 |
Segment Assets |
|
|
|
|
|
|
|
| Treasury | 3,050,768 | 2,971,047 | 2,617,490 | 3,050,768 | 2,617,490 | 3,165,601 |
| Corporate/Wholesale Banking | 4,580,074 | 3,979,638 | 3,042,892 | 4,580,074 | 3,042,892 | 3,282,581 |
| Retail Banking | 3,879,775 | 4,040,982 | 3,810,103 | 3,879,775 | 3,810,103 | 4,436,505 |
| Other Banking operations | 1,806 | 3,000 | 539 | 1,806 | 539 | 1,854 |
| Unallocated | 663,369 | 648,897 | 576,566 | 663,369 | 576,566 | 611,152 |
| Total | 12,175,792 | 11,643,564 | 10,047,590 | 12,175,792 | 10,047,590 | 11,497,693 |
Segment Liabilities |
|
|
|
|
|
|
|
| Treasury | 2,860,293 | 2,778,773 | 2,458,572 | 2,860,293 | 2,458,572 | 3,050,206 |
| Corporate/Wholesale Banking | 4,379,950 | 3,792,853 | 2,978,799 | 4,379,950 | 2,978,799 | 3,184,798 |
| Retail Banking | 3,708,703 | 3,848,458 | 3,722,584 | 3,708,703 | 3,722,584 | 4,294,476 |
| Other Banking operations | - | - | - | - | - | - |
| Unallocated | 53,523 | 60,699 | 41,055 | 53,523 | 41,055 | 73,975 |
| Total | 11,002,469 | 10,480,783 | 9,201,010 | 11,002,469 | 9,201,010 | 10,603,455 |
Capital employed: |
|
|
|
|
|
| |
(Segment Assets - Segment Liabilities) |
|
|
|
|
|
| |
| Treasury | 190,475 | 192,274 | 158,918 | 190,475 | 158,918 | 115,395 |
| Corporate/Wholesale Banking | 200,124 | 186,785 | 64,093 | 200,124 | 64,093 | 97,783 |
| Retail Banking | 171,072 | 192,524 | 87,519 | 171,072 | 87,519 | 142,029 |
| Other Banking operations | 1,806 | 3,000 | 539 | 1,806 | 539 | 1,854 |
| Unallocated | 609,846 | 588,198 | 535,511 | 609,846 | 535,511 | 537,177 |
| Total | 1,173,323 | 1,162,781 | 846,580 | 1,173,323 | 846,580 | 894,238 |
@ | For the above segment reporting, the reportable segments are identified into Treasury, Corporate/Wholesale Banking, Retail Banking and Other Banking Operations in compliance with the RBI guidelines. | ||||||
| Statement of Assets and Liabilities of the bank as on September 30, 2017 is given below: |
|
| ||||
|
|
|
|
| (` in Lakhs) |
|
|
| Particulars | As at 30.09.2017 | As at 30.09.2016 | As at 31.03.2017 |
|
| |
| Unaudited | Unaudited | Audited |
|
| ||
| CAPITAL AND LIABILITIES |
|
|
|
|
| |
| Capital | 39,091 | 34,410 | 34,481 |
|
| |
| Reserves and Surplus | 1,134,232 | 812,170 | 859,757 |
|
| |
| Deposits | 9,721,075 | 8,629,910 | 9,766,456 |
|
| |
| Borrowings | 873,320 | 265,536 | 589,732 |
|
| |
| Other Liabilities and Provisions | 408,074 | 305,564 | 247,267 |
|
| |
| Total | 12,175,792 | 10,047,590 | 11,497,693 |
|
| |
| ASSETS |
|
|
|
|
| |
| Cash and Balances with Reserve Bank of India | 472,637 | 398,575 | 457,657 |
|
| |
| Balance with Banks and Money at Call and Short Notice | 404,869 | 230,116 | 287,560 |
|
| |
| Investments | 2,631,750 | 2,385,220 | 2,819,609 |
|
| |
| Advances | 8,064,588 | 6,468,694 | 7,333,627 |
|
| |
| Fixed Assets | 47,203 | 51,034 | 48,947 |
|
| |
| Other Assets | 554,745 | 513,951 | 550,293 |
|
| |
| Total | 12,175,792 | 10,047,590 | 11,497,693 |
|
| |
Notes: |
|
|
|
|
|
| |
1 | The above Standalone Unaudited Financial Results ("Results") for the quarter and half year ended September 30, 2017 were reviewed by the Audit Committee and approved by the Board of Directors at its meeting held on October 16, 2017. These Results have been subjected to "Limited Review" by the Statutory Central Auditors of the Bank and an unqualified review report has been issued. | ||||||
2 | The Bank has made provision for Non Performing Assets as stipulated under Reserve Bank of India (RBI) norms. Further, provision for standard assets including requirements for exposures to entities with Unhedged Foreign Currency Exposures and provision for restructured advances have been made as per RBI guidelines. | ||||||
3 | The Bank has followed the same significant accounting policies in the preparation of the Results as those followed in the annual financial statements for the year ended March 31, 2017. | ||||||
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. | ||||||
5 | The Business operations of the Bank are largely concentrated in India and for purpose of Segmental reporting, the bank considered to operate only in domestic segment, though the bank has its operations in International Finance Service Centre (IFSC) Banking Unit in Gujarat International Finance Tec-city (GIFT). The business conducted from the same is considered as a part of Indian operations. | ||||||
|
|
|
|
|
|
|
|
6 | Other income includes fees earned from providing services to customers, commission from non-fund based banking activities, earnings from foreign exchange and derivative transactions, selling of third party products, profit on sale of investments (net), recoveries from advances written off. | ||||||
7 | During the quarter ended June 30, 2017 , the Bank has issued 21,55,17,241 equity shares of ` 2 each for cash pursuant to a Qualified Institution Placement (QIP) as per the relevant provisions of SEBI (Listing Obligations and Disclosure Requirements) Regulations at ` 116.00 per share aggregating to ` 250,000 Lakhs (including share premium). This resulted in an increase of ` 4,310.35 Lakhs in Share Capital and ` 242,077.64 Lakhs (net of issue expenses) in Share premium account. | ||||||
8 | During the quarter and half year ended September 30, 2017, the Bank allotted 1,22,81,993 and 1,50,07,960 equity shares of ` 2 each respectively, pursuant to the exercise of stock options by certain employees. | ||||||
9 | 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 and half year ended September 30, 2017 or the previous periods/year. | ||||||
10 | The Board of Directors have recommended a dividend of 45% i.e. ` 0.90/- per Equity Share on face value of ` 2/- each for the year 2016-17 (previous year 35% i.e ` 0.70/- per Equity Share) subject to the approval of the members at the ensuing Annual General Meeting. In terms of revised Accounting Standard (AS) 4 "Contingencies and Events occuring after the Balance sheet date" as notified by the Ministry of Corporate affairs through amendments to Companies (Accounting Standards) Amendment Rules, 2016, the Bank has not appropriated proposed dividend (including tax) aggregating to ` 18,675 Lakhs from the statement of Profit and loss account for the year ended March 31, 2017. However the effect of the proposed dividend has been reckoned in determining capital funds in the computation of Capital adequacy ratio as on March 31, 2017. | ||||||
10 | Pursuant to Board approved policy on preparation of segment information, the Bank, with effect from quarter ended September 30, 2017, has revised the basis of preparation of segment information related to the allocation of RIDF deposits from Treasury segment to Corporate/Wholesale Banking and Retail Banking segments and allocation of provision related to advances on a direct identification basis for more appropriate presentation of the segment results. Figures for the previous periods have been regrouped / reclassified to conform to current period's classification. The impact of above regrouping / reclassification on segment results for the quarter and half year ended September 30, 2017, is summarized in the table below: | ||||||
|
|
|
|
|
|
| (` in Lakhs) |
| (Decrease) / Increase | Quarter ended | Half year ended | Year ended 31.03.2017 | |||
| 30.09.2017 | 30.06.2017 | 30.09.2016 | 30.09.2017 | 30.09.2016 | ||
| Treasury | (205) | (91) | (156) | (296) | (588) | (698) |
| Corporate/Wholesale Banking | (1,206) | (4,818) | (3,837) | (6,024) | (6,919) | (11,391) |
| Retail Banking | 481 | 4,171 | 2,844 | 4,652 | 5,702 | 8,139 |
| Other Banking operations | 930 | 738 | 1,149 | 1,668 | 1,805 | 3,950 |
| Unallocated | - | - | - | - | - | - |
|
|
|
|
|
|
|
|
| The above regrouping / reclassification has no impact on the overall profit of the bank for the quarter and half year ended September 30, 2017 or the previous periods/year. | ||||||
|
|
|
|
|
|
|
|
11 | Previous period's / year's figures have been regrouped / reclassified, where necessary to conform to current period's classification. | ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| SHYAM SRINIVASAN | ||
Mumbai |
|
|
| MANAGING DIRECTOR & CEO | |||
October 16, 2017 |
|
|
| (DIN: 02274773) | |||