Last checked at 16 Oct 2018 14:31
SDF-24/ /2018-19 16TH October 2018
To,
The London Stock Exchange
Dear Sir,
We enclose herewith the Un-Audited Financial Results of the Bank for the period ended September 30, 2018 which was approved at the Bank's Board of Directors meeting held on 16th October 2018.
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 unaudited quarterly standalone financial results and standalone year to date 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 ofThe Federal Bank Limited ('the Bank') for the quarter ended 30 September 2018 and year to date results for the period from 1 April 2018 to 30 September 2018 ('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 ('Listing Regulations'), except for the disclosures relating to consolidated Pillar 3 disclosure as at 30 September 2018, 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.
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 16 October 2018. 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" specified under section 143(10) of the Companies Act, 2013. 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 114 Branches and Treasury Branch reviewed by either of us and un-reviewed returns in respect of 1,138 branches. These Branches cover 59.53% of the advances portfolio (excluding outstanding of asset recovery branches and food credit advance) of the Bank and 63.46% of non-performing advances of the bank.
5. Without qualifying our conclusion, we draw attention to Note No. 8 regarding exercise of the option by the Bank by spreading the provision for Mark to Market (MTM) losses over four quarters resulting into carrying forward of un-amortised MTM losses of ₹ 2,946.99 Lakhs as at 30 September 2018 for amortisation in remaining quarters.
Limited review report on unaudited quarterly standalone financial results and standalone year to date results of The Federal Bank Limited pursuant to the Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (continued)
6. 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 Listing Regulations 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 |
Mumbai | Mumbai |
16 October 2018 | 16 October 2018 |
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, 2018 | |||||||||||||||
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Particulars | Quarter ended | Half year ended | Year ended 31.03.2018 | ||||||||||||
30.09.2018 | 30.06.2018 | 30.09.2017 | 30.09.2018 | 30.09.2017 | |||||||||||
Unaudited | Unaudited | Unaudited | Unaudited | Unaudited | Audited | ||||||||||
1. Interest earned (a)+(b)+(c)+(d) | 276,492 | 266,738 | 237,960 | 543,230 | 470,369 | 975,286 | |||||||||
(a) | Interest/discount on advances/bills | 221,051 | 207,944 | 185,900 | 428,995 | 364,675 | 753,878 | ||||||||
(b) | Income on investments | 48,834 | 50,715 | 45,000 | 99,549 | 91,829 | 191,744 | ||||||||
(c) | Interest on balances with Reserve Bank of India and other inter bank funds | 2,089 | 2,523 | 2,586 | 4,612 | 4,953 | 9,581 | ||||||||
(d) | Others | 4,518 | 5,556 | 4,474 | 10,074 | 8,912 | 20,083 | ||||||||
2. Other income | 32,289 | 27,086 | 28,722 | 59,375 | 61,632 | 115,912 | |||||||||
3. TOTAL INCOME (1+2) | 308,781 | 293,824 | 266,682 | 602,605 | 532,001 | 1,091,198 | |||||||||
4. Interest expended | 174,245 | 168,732 | 148,069 | 342,977 | 300,411 | 617,005 | |||||||||
5. Operating expenses (i)+(ii) | 64,776 | 64,800 | 60,292 | 129,576 | 117,484 | 245,090 | |||||||||
(i) | Employees cost | 30,893 | 34,502 | 31,274 | 65,395 | 61,119 | 124,247 | ||||||||
(ii) | Other operating expenses | 33,883 | 30,298 | 29,018 | 64,181 | 56,365 | 120,843 | ||||||||
6. TOTAL EXPENDITURE (4+5)(excluding provisions and contingencies) | 239,021 | 233,532 | 208,361 | 472,553 | 417,895 | 862,095 | |||||||||
7. OPERATING PROFIT (3-6) (Profit before provisions and contingencies) | 69,760 | 60,292 | 58,321 | 130,052 | 114,106 | 229,103 | |||||||||
8. Provisions (other than tax) and contingencies | 28,882 | 19,915 | 17,677 | 48,797 | 41,321 | 94,717 | |||||||||
9. Exceptional items |
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10. Profit from Ordinary Activities before tax(7-8-9) | 40,878 | 40,377 | 40,644 | 81,255 | 72,785 | 134,386 | |||||||||
11. Tax expense |
| 14,274 | 14,106 | 14,274 | 28,380 | 25,400 | 46,501 | ||||||||
12. Net Profit from Ordinary Activities after tax (10-11) | 26,604 | 26,271 | 26,370 | 52,875 | 47,385 | 87,885 | |||||||||
13. Extraordinary items (net of tax expense) |
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14. Net Profit for the period (12-13) |
| 26,604 | 26,271 | 26,370 | 52,875 | 47,385 | 87,885 | ||||||||
15. Paid-up Equity Share Capital(Face value ` 2/- per Equity Share) | 39,612 | 39,552 | 39,091 | 39,612 | 39,091 | 39,443 | |||||||||
16. Reserves excluding Revaluation Reserve |
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| 1,181,080 | |||||||||
17. 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 | 13.29 | 14.50 | 14.63 | 13.29 | 14.63 | 14.70 | ||||||||
(iii) | Earnings per Share (EPS) (in `) |
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| (a) Basic EPS (before and after extra ordinary items) | 1.34* | 1.33* | 1.35* | 2.67* | 2.58* | 4.62 | ||||||||
| (b) Diluted EPS (before and after extra ordinary items) | 1.33* | 1.32* | 1.33* | 2.65* | 2.53* | 4.56 | ||||||||
(iv) | NPA Ratios |
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| a) Gross NPA | 318,453 | 286,882 | 194,897 | 318,453 | 194,897 | 279,562 | ||||||||
| b) Net NPA | 179,629 | 162,022 | 106,638 | 179,629 | 106,638 | 155,196 | ||||||||
| c) % of Gross NPA | 3.11 | 3.00 | 2.39 | 3.11 | 2.39 | 3.00 | ||||||||
| d) % of Net NPA | 1.78 | 1.72 | 1.32 | 1.78 | 1.32 | 1.69 | ||||||||
(v) | Return on Assets (%) | 0.19* | 0.20* | 0.24 * | 0.39* | 0.43 * | 0.75 | ||||||||
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* Not Annualised |
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Segment Information@ |
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Particulars | Quarter ended | Half year ended | Year ended 31.03.2018 |
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30.09.2018 | 30.06.2018 | 30.09.2017 | 30.09.2018 | 30.09.2017 |
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Unaudited | Unaudited | Unaudited | Unaudited | Unaudited | Audited |
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Segment Revenue: |
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| Treasury | 61,715 | 62,296 | 58,686 | 124,011 | 122,462 | 239,556 |
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| Corporate/Wholesale Banking | 118,582 | 112,799 | 94,157 | 231,381 | 184,798 | 378,695 |
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| Retail Banking | 123,312 | 114,264 | 109,591 | 237,576 | 216,569 | 454,386 |
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| Other Banking operations | 5,172 | 4,465 | 4,248 | 9,637 | 8,172 | 18,561 |
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| Unallocated | - | - | - | - | - | - |
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| Total Revenue | 308,781 | 293,824 | 266,682 | 602,605 | 532,001 | 1,091,198 |
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| Less: Inter Segment Revenue | - | - | - | - | - | - |
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| Income from Operations | 308,781 | 293,824 | 266,682 | 602,605 | 532,001 | 1,091,198 |
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Segment Results (net of provisions): |
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| Treasury | 3,468 | 9,796 | 10,902 | 13,264 | 23,642 | 25,650 |
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| Corporate/Wholesale Banking | 4,999 | 1,914 | 6,405 | 6,913 | 4,583 | (13,797) |
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| Retail Banking | 33,062 | 28,323 | 22,789 | 61,385 | 43,614 | 120,093 |
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| Other Banking operations | 216 | 750 | 1,047 | 966 | 1,937 | 5,251 |
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| Unallocated | (867) | (406) | (499) | (1,273) | (991) | (2,811) |
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| Profit before tax | 40,878 | 40,377 | 40,644 | 81,255 | 72,785 | 134,386 |
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Segment Assets |
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| Treasury | 3,118,628 | 3,145,414 | 3,050,768 | 3,118,628 | 3,050,768 | 3,510,841 |
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| Corporate/Wholesale Banking | 5,856,115 | 5,249,962 | 4,580,074 | 5,856,115 | 4,580,074 | 5,072,766 |
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| Retail Banking | 4,680,773 | 4,593,053 | 3,879,775 | 4,680,773 | 3,879,775 | 4,539,627 |
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| Other Banking operations | 1,965 | 1,184 | 1,806 | 1,965 | 1,806 | 533 |
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| Unallocated | 783,415 | 678,484 | 663,369 | 783,415 | 663,369 | 707,628 |
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| Total | 14,440,896 | 13,668,097 | 12,175,792 | 14,440,896 | 12,175,792 | 13,831,395 |
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Segment Liabilities |
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| Treasury | 3,005,316 | 2,981,393 | 2,860,293 | 3,005,316 | 2,860,293 | 3,348,514 |
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| Corporate/Wholesale Banking | 5,626,533 | 5,005,327 | 4,379,950 | 5,626,533 | 4,379,950 | 4,849,217 |
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| Retail Banking | 4,499,891 | 4,380,781 | 3,708,703 | 4,499,891 | 3,708,703 | 4,341,585 |
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| Other Banking operations | - | 4 | - | - | - | 1 |
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| Unallocated | 55,023 | 50,716 | 53,523 | 55,023 | 53,523 | 71,055 |
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| Total | 13,186,763 | 12,418,221 | 11,002,469 | 13,186,763 | 11,002,469 | 12,610,372 |
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Capital employed: |
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(Segment Assets - Segment Liabilities) |
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| Treasury | 113,312 | 164,021 | 190,475 | 113,312 | 190,475 | 162,327 |
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| Corporate/Wholesale Banking | 229,582 | 244,635 | 200,124 | 229,582 | 200,124 | 223,549 |
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| Retail Banking | 180,882 | 212,272 | 171,072 | 180,882 | 171,072 | 198,042 |
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| Other Banking operations | 1,965 | 1,180 | 1,806 | 1,965 | 1,806 | 532 |
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| Unallocated | 728,392 | 627,768 | 609,846 | 728,392 | 609,846 | 636,573 |
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| Total | 1,254,133 | 1,249,876 | 1,173,323 | 1,254,133 | 1,173,323 | 1,221,023 |
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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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| Statement of Assets and Liabilities of the bank as on September 30, 2018 is given below: |
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| Particulars | As at 30.09.2018 | As at 30.09.2017 | As at 31.03.2018 |
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| Unaudited | Unaudited | Audited |
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| CAPITAL AND LIABILITIES |
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| Capital | 39,612 | 39,091 | 39,443 |
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| Reserves and Surplus | 1,214,521 | 1,134,232 | 1,181,580 |
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| Deposits | 11,818,242 | 9,721,075 | 11,199,249 |
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| Borrowings | 887,349 | 873,320 | 1,153,350 |
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| Other Liabilities and Provisions | 481,172 | 408,074 | 257,773 |
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| Total | 14,440,896 | 12,175,792 | 13,831,395 |
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| ASSETS |
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| Cash and Balances with Reserve Bank of India | 571,829 | 472,637 | 513,276 |
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| Balance with Banks and Money at Call and Short Notice | 242,941 | 404,869 | 407,065 |
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| Investments | 2,821,385 | 2,631,750 | 3,078,107 |
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| Advances | 10,094,088 | 8,064,588 | 9,195,747 |
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| Fixed Assets | 45,705 | 47,203 | 45,737 |
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| Other Assets | 664,948 | 554,745 | 591,463 |
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| Total | 14,440,896 | 12,175,792 | 13,831,395 |
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Notes: |
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1 | The above Standalone Unaudited Financial Results for the quarter and half year ended September 30, 2018 were reviewed by the Audit Committee and approved by the Board of Directors at its meeting held on October 16, 2018. 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 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 results as those followed in the annual financial statements for the year ended March 31, 2018. |
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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 audit or review by the Statutory Central Auditors of the Bank. |
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5 | The Business operations of the Bank are largely concentrated in India and for the purpose of Segmental 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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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. |
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7 | During the quarter and half year ended September 30, 2018, the Bank has allotted 2,977,913 and 8,458,468 equity shares of ` 2 each, pursuant to the exercise of stock options by employees. |
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8 | On marking to market its investments as at June 30, 2018 in Government Securities held under Available for Sale and Held for Trading category, the Bank has incurred net depreciation of ` 5,893.97 Lakhs. As permitted vide RBI Circular DBR.No.BP.BC.113 /21.04.048/2017-18 dated June 15, 2018, the Bank has exercised the option of spreading the provision for such Marked to Market (MTM) losses equally over four quarters commencing from the quarter ended June 30, 2018. Accordingly, during the quarter and half year ended September 30, 2018, ` 1,473.49 Lakhs and ` 2,946.98 Lakhs has been charged to the profit and loss account respectively towards such MTM losses and the balance unamortised MTM Loss of ₹ 2,946.99 Lakhs has been carried forward, which shall be amortised in remaining quarters. |
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9 | Ministry of Labour and Employment, Government of India on March 29, 2018 has enhanced the gratuity ceiling to an employee under Payment of Gratuity Act, 1972 to ` 20 Lakhs from earlier limit of ` 10 lakhs. This change has resulted to an incremental gratuity liability amounting to ` 7,143.90 lakhs. As per the RBI circular DBR.BP.9730/21.04.018/2017-18 dated April 27, 2018 the Bank has an option to spread the impact of change in gratuity ceiling over four quarters beginning with the quarter ended March 31, 2018. The Bank had availed the option to spread the incremental gratuity expenditure over four quarters beginning with the quarter ended March 31, 2018. Accordingly, during the quarter ended March 31, 2018 the Bank has charged to the profit and loss account an amount of ` 1,785.97 Lakhs and there was an unamortised gratuity expenditure of ₹ 5,357.93 Lakhs. Based on the correspondence with the Reserve Bank of India (RBI) during the quarter ended June 30, 2018, the Bank has charged to the profit and loss account the entire unamortised gratuity expenditure of ₹ 5,357.93 Lakhs. |
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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 |
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| MANAGING DIRECTOR & CEO |
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October 16, 2018 |
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| (DIN: 02274773) |
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