Last checked at 3 Nov 2015 07:00
SDF-24/ /2015-16 03rd November 2015
To,
The London Stock Exchange
Dear Sir,
We enclose herewith the UnAudited Financial Results of the Bank alongwith Limited Review Report for the period ended September 30, 2015 which was approved at the Bank's Board of Directors meeting held on 20th October 2015.
Kindly take the same on your record.
For The Federal Bank Limited
Girish Kumar G
COMPANY SECRETARY
Deloitte Haskins & Sells | M P Chitale & Co. |
Chartered Accountants Wilmont Park Business Centre 1st Floor, Warriam Road Kochi - 682 016 INDIA | Chartered AccountantsFirst Floor, Hamam HouseAmbalal Doshi Marg, FortMumbai - 400 001INDIA |
Tel: +91 484 2353694 Fax: +91 484 2380094 | Tel: +91-22-22651186Fax:+91-22-22655334
|
INDEPENDENT AUDITORS' REVIEW REPORT
TO THE BOARD OF DIRECTORS OF
THE FEDERAL BANK LIMITED
1. We have reviewed the accompanying Statement of Standalone Unaudited Financial Results of THE FEDERAL BANK LIMITED ("the Bank") for the Quarter and Half Year ended 30th September, 2015 ("the Statement"), being submitted by the Bank pursuant to the requirement of Clause 41 of the Listing Agreements with the Stock Exchanges, except for the disclosures referred to in paragraph 6 below. This Statement is the responsibility of the Bank's Management and has been approved by the Board of Directors. Our responsibility is to issue a report on the Statement based on our review.
2. We conducted our review of the Statement in accordance with the Standard on Review Engagements (SRE) 2410'Review of Interim Financial Information Performed by the Independent Auditor of the Entity', issued by the Institute of Chartered Accountants of India. This Standard requires that we plan and perform the review to obtain moderate assurance as to whether the Statement is free of material misstatement. A review is limited primarily to inquiries of Bank personnel and analytical procedures applied to financial data and thus provides less assurance than an audit. We have not performed an audit and, accordingly, we do not express an audit opinion.
3. In the conduct of our review, 111 branches have been reviewed by one of us which covers 55 percent of the advances portfolio of the bank as at 30th September, 2015. We have also relied upon various returns received from the branches of the bank.
4. Based on our review conducted as stated above, nothing has come to our attention that causes us to believe that the accompanying Statement, prepared in accordance with the Accounting Standards specified under Section 133 of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014 and other accounting principles generally accepted in India, has not disclosed the information required to be disclosed in terms of Clause 41 of the Listing Agreements with the Stock Exchanges, 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 prescribed by the Reserve Bank of India in respect of income recognition, asset classification, provisioning and other related matters.
….2
Deloitte Haskins & Sells | M P Chitale & Co. |
: 2 :
5. Attention is drawn to Note No. 11 of the Statement regarding deferment of shortfall of Rs.569.78 Lakhs arising from the sale of certain non-performing assets during the quarter ended 30th September, 2015 in terms of RBI Master Circular DBR.No.BP.BC.2/21.04.048/2015-16 on Prudential Norms on Income Recognition, Asset Classification and Provisioning pertaining to advances, dated July 1, 2015, and the unamortised balance as at 30th September, 2015 of Rs.488.38 Lakhs.
Our conclusion is not modified in respect of this matter.
6. Further, we also report that we have traced the number of shares as well as the percentage of shareholding in respect of the aggregate amount of public shareholding, and the number of shares as well as the percentage of shares pledged/encumbered and non-encumbered in respect of the aggregate amount of promoters and promoter group shareholding in terms of Clause 35 of the Listing Agreements with the Stock Exchanges and the particulars relating to investor complaints disclosed in the Statement, from the details furnished by the Registrars. The "Pillar 3 disclosures including Leverage Ratio under Basel III Capital Regulations" disclosed on the Bank's website and in respect of which a link has been provided in the Statement have not been subjected to our review.
For DELOITTE HASKINS & SELLS | For M P CHITALE & CO. | |
Chartered Accountants | Chartered Accountants | |
(Firm's Registration No.008072S) | (Firm's Registration No. 101851W) | |
M. Ramachandran | Ashutosh Pednekar | |
Partner | Partner | |
(Membership No.16399) | (Membership No. 041037) |
KOCHI, 20th October, 2015.
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, 2015 | |||||||
(` in Lakhs) | |||||||
Particulars | Quarter ended | Half year ended | Year ended 31.03.2015 | ||||
30.09.2015 | 30.06.2015 | 30.09.2014 | 30.09.2015 | 30.09.2014 | |||
Unaudited | Unaudited | Unaudited | Unaudited | Unaudited | Audited | ||
1. Interest earned (a)+(b)+(c)+(d) | 190,226 | 191,315 | 186,958 | 381,541 | 364,108 | 741,946 | |
(a) | Interest/discount on advances/bills | 140,005 | 141,423 | 136,294 | 281,428 | 266,281 | 544,683 |
(b) | Income on Investments | 42,356 | 43,037 | 40,989 | 85,393 | 82,346 | 164,968 |
(c) | Interest on balances with Reserve Bank of India and other inter bank funds | 1,905 | 1,309 | 2,327 | 3,214 | 3,578 | 6,236 |
(d) | Others | 5,960 | 5,546 | 7,348 | 11,506 | 11,903 | 26,059 |
2. Other Income | 18,227 | 19,394 | 19,586 | 37,621 | 35,240 | 87,831 | |
3. TOTAL INCOME (1+2) | 208,453 | 210,709 | 206,544 | 419,162 | 399,348 | 829,777 | |
4. Interest expended | 129,392 | 130,839 | 126,378 | 260,231 | 247,106 | 503,905 | |
5. Operating Expenses (i)+(ii) | 45,404 | 43,149 | 39,190 | 88,553 | 76,113 | 163,093 | |
(i) | Employees Cost | 24,893 | 25,229 | 20,380 | 50,122 | 40,823 | 89,196 |
(ii) | Other operating expenses | 20,511 | 17,920 | 18,810 | 38,431 | 35,290 | 73,897 |
6. TOTAL EXPENDITURE (4+5)(excluding Provisions and Contingencies) | 174,796 | 173,988 | 165,568 | 348,784 | 323,219 | 666,998 | |
7. OPERATING PROFIT (3-6) (Profit before Provisions and Contingencies) | 33,657 | 36,721 | 40,976 | 70,378 | 76,129 | 162,779 | |
8. Provisions (other than Tax) and Contingencies | 8,728 | 15,310 | 4,571 | 24,038 | 6,779 | 10,675 | |
9. Exceptional Items | - | - | - | - | - | - | |
10. Profit from Ordinary Activities before tax(7-8-9) | 24,929 | 21,411 | 36,405 | 46,340 | 69,350 | 152,104 | |
11. Tax expense | 8,801 | 7,272 | 12,375 | 16,073 | 23,297 | 51,529 | |
12. Net Profit from Ordinary Activities after tax (10-11) | 16,128 | 14,139 | 24,030 | 30,267 | 46,053 | 100,575 | |
13. Extraordinary items (net of tax expense) | - | - | - | - | - | - | |
14. Net Profit for the period (12-13) | 16,128 | 14,139 | 24,030 | 30,267 | 46,053 | 100,575 | |
15. Paid-up Equity Share Capital (Refer Note 10)(Face value ` 2/- per Equity Share) | 34,349 | 17,159 | 17,111 | 34,349 | 17,111 | 17,133 | |
16. Reserves excluding Revaluation Reserve | 756,180 | ||||||
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 | 14.71 | 15.07 | 14.45 | 14.71 | 14.45 | 15.46 | |
(iii) | Earnings per Share (EPS) (in `) (Refer Note 10) | ||||||
(a) Basic EPS (before and after Extra ordinary Items) | 0.94* | 0.83* | 1.40* | 1.77* | 2.69* | 5.87 | |
(b) Diluted EPS (before and after Extra ordinary Items) | 0.92* | 0.82* | 1.38* | 1.74* | 2.65* | 5.82 | |
(iv) | NPA Ratios | ||||||
a) Gross NPA | 149,873 | 130,458 | 103,105 | 149,873 | 103,105 | 105,773 | |
b) Net NPA | 67,484 | 48,447 | 31,850 | 67,484 | 31,850 | 37,327 | |
c) % of Gross NPA | 2.90 | 2.59 | 2.10 | 2.90 | 2.10 | 2.04 | |
d) % of Net NPA | 1.33 | 0.98 | 0.66 | 1.33 | 0.66 | 0.73 | |
(v) | Return on Assets (%) | 0.20* | 0.17* | 0.32* | 0.37* | 0.62* | 1.32 |
18. Public Shareholding: | |||||||
Number of Shares (in Lakhs) (Refer Note 10) | 16,859.26 | 8,418.54 | 8,383.51 | 16,859.26 | 8,383.51 | 8,399.88 | |
Percentage of shareholding # | 98.17 | 98.12 | 97.99 | 98.17 | 97.99 | 98.05 | |
19. Promoters and Promoter group share holding | |||||||
(a) | Pledged/Encumbered | ||||||
- | Number of Shares | NIL | NIL | NIL | NIL | NIL | NIL |
- | Percentage of Shares (as a % of the total shareholding of promoter and promoter group) | NIL | NIL | NIL | NIL | NIL | NIL |
- | Percentage of Shares (as a % of the total share capital of the company) | NIL | NIL | NIL | NIL | NIL | NIL |
(b) | Non-encumbered | ||||||
- | Number of Shares | NIL | NIL | NIL | NIL | NIL | NIL |
- | Percentage of Shares (as a % of the total shareholding of promoter and promoter group) | NIL | NIL | NIL | NIL | NIL | NIL |
- | Percentage of Shares (as a % of the total share capital of the company) | NIL | NIL | NIL | NIL | NIL | NIL |
* Not Annualised | |||||||
# excludes shares held by custodian against Global Depository Receipts. | |||||||
Segment Information@ | |||||||
(` in Lakhs) | |||||||
Particulars | Quarter ended | Half year ended | Year ended 31.03.2015 | ||||
30.09.2015 | 30.06.2015 | 30.09.2014 | 30.09.2015 | 30.09.2014 | |||
Unaudited | Unaudited | Unaudited | Unaudited | Unaudited | Audited | ||
Segment Revenue: | |||||||
Treasury | 55,951 | 57,729 | 54,718 | 113,680 | 108,148 | 225,027 | |
Corporate/Wholesale Banking | 58,469 | 53,062 | 60,409 | 111,531 | 116,035 | 234,993 | |
Retail Banking | 93,125 | 99,635 | 86,356 | 192,760 | 169,287 | 357,797 | |
Other Banking operations | 908 | 283 | 5,061 | 1,191 | 5,878 | 11,960 | |
Unallocated | - | - | - | - | - | ||
Total Revenue | 208,453 | 210,709 | 206,544 | 419,162 | 399,348 | 829,777 | |
Less: Inter Segment Revenue | - | - | - | - | - | - | |
Income from Operations | 208,453 | 210,709 | 206,544 | 419,162 | 399,348 | 829,777 | |
Segment Results (net of provisions): | |||||||
Treasury | 8,159 | 1,799 | 4,595 | 9,958 | 12,476 | 34,218 | |
Corporate/Wholesale Banking | 2,763 | 1,439 | 12,763 | 4,202 | 25,266 | 33,399 | |
Retail Banking | 13,802 | 18,438 | 14,791 | 32,240 | 27,236 | 76,112 | |
Other Banking operations | 706 | 234 | 4,749 | 940 | 5,164 | 10,372 | |
Unallocated | (501) | (499) | (493) | (1,000) | (792) | (1,997) | |
Profit before tax | 24,929 | 21,411 | 36,405 | 46,340 | 69,350 | 152,104 | |
Capital employed: | |||||||
Treasury | 283,038 | 308,062 | 278,726 | 283,038 | 278,726 | 257,003 | |
Corporate/Wholesale Banking | 117,539 | 108,880 | 118,900 | 117,539 | 118,900 | 133,845 | |
Retail Banking | 186,828 | 172,157 | 157,774 | 186,828 | 157,774 | 196,520 | |
Other Banking operations | 4,701 | 4,449 | 1,037 | 4,701 | 1,037 | 2,432 | |
Unallocated | 213,637 | 195,436 | 184,614 | 213,637 | 184,614 | 184,013 | |
Total | 805,743 | 788,984 | 741,051 | 805,743 | 741,051 | 773,813 | |
@ | 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 revised RBI guidelines. The Bank mainly operates in India. | ||||||
Notes: | |||||||
1 | Statement of Assets and Liabilities of the bank as on September 30, 2015 is given below: | ||||||
(` in Lakhs) | |||||||
Particulars | As at 30.09.2015 Unaudited | As at 30.09.2014 Unaudited | As at 31.03.2015 Audited | ||||
CAPITAL AND LIABILITIES | |||||||
Capital | 34,349 | 17,111 | 17,133 | ||||
Reserves and Surplus | 771,394 | 723,940 | 756,680 | ||||
Deposits | 7,378,320 | 6,456,386 | 7,082,499 | ||||
Borrowings | 162,095 | 345,527 | 230,825 | ||||
Other Liabilities and Provisions | 280,333 | 294,279 | 197,911 | ||||
Total | 8,626,491 | 7,837,243 | 8,285,048 | ||||
ASSETS | |||||||
Cash and Balances with Reserve Bank of India | 369,100 | 317,890 | 337,954 | ||||
Balance with Banks and Money at Call and Short Notice | 274,010 | 180,918 | 140,045 | ||||
Investments | 2,319,935 | 1,939,046 | 2,056,882 | ||||
Advances | 5,086,667 | 4,846,614 | 5,128,499 | ||||
Fixed Assets | 50,282 | 42,959 | 46,663 | ||||
Other Assets | 526,497 | 509,816 | 575,005 | ||||
Total | 8,626,491 | 7,837,243 | 8,285,048 | ||||
2 | The above Standalone Unaudited Financial Results for the quarter and half year ended September 30, 2015 were reviewed by the Audit Committee and recommended for approval to and approved by the Board of Directors at its meeting held on October 20, 2015. These Results have been subjected to "Limited Review" by the Statutory Central Auditors of the Bank and an unqualified report has been issued by them. | ||||||
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, 2015. | ||||||
4 | As a prudent policy, the Bank holds provisions for Non Performing Assets over and above the minimum required under the 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. | ||||||
5 | RBI Master Circular DBR.No.BP.BC.1/21.06.201/2015-16 on Basel III Capital Regulations dated July 01, 2015 contains guidelines on certain 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. | ||||||
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 Thrid party products, profit / loss on sale of investments (net), recoveries from accounts written off. | ||||||
7 | Pursuant to RBI Circular DBR.BP.BC.No.31/21.04.018/2015-16 dated July 16, 2015, the Bank has, effective from September 30, 2015 included its deposits placed with NABARD, SIDBI, and NHB on account of shorfall in lending to priority sector under 'Other Assets'. Hitherto these were included under 'Investments' and Interest income thereon was included under 'Interest Earned - Income on Investments'. Arising out of regrouping in line with the above mentioned RBI guidelines, interest income on deposits placed with NABARD, SIDBI and NHB is included under 'Interest Earned - Others'. Figures for the previous periods / year have been regrouped / reclassified to conform to current period classification. The above change in classification has no impact on the profit of the Bank for the quarter and half year ended September 30, 2015. | ||||||
8 | Number of Investor complaints received and disposed off during the quarter ended September 30, 2015: | ||||||
a) Pending at the beginning of the quarter | : NIL | ||||||
b) Received during the quarter | : 16 | ||||||
c) Disposed off during the quarter | : 16 | ||||||
d) Pending at the end of the quarter | : NIL | ||||||
9 | During the quarter and half year ended September 30, 2015, the Bank allotted 15,47,982 and 28,37,991 Equity Shares respectively, pursuant to the exercise of stock options by certain employees. | ||||||
10 | The shareholders of the Bank had approved the issue of Bonus Shares at the Annual General Meeting held on June 29, 2015, in the Ratio of 1:1 for Shares held as on the record date of July 9, 2015. Pursuant to which 85,79,45,206 fully paid up Equity Shares had been allotted by the bank as bonus shares and One Global Depositary share (GDS) had been issued as bonus for every GDS held to the existing holders as on the record date. Consequently, as per the extant ESOS 2010 Scheme bonus options had been provided to the existing ESOS option holders and the exercise price had been adjusted accordingly. The earnings per share have been adjusted for previous periods / year in accordance with Accounting Standard 20, Earnings per share. | ||||||
11 | During the quarter ended September 30, 2015 the Bank had assigned certain Non performing financial assets to an Asset Reconstruction Company. In terms of RBI Master Circular DBR.No.BP.BC.2/21.04.048/2015-16 on Prudential norms on Income Recognition, Asset Classification and Provisioning pertaining to Advances dated July 1, 2015, the shortfall arrived at by deducting sale consideration from the Net Book value of the financial assets, amounting to ` 569.78 Lakhs, is amortised over a period of two years. Accordingly, the bank has charged to the profit and loss account an amount of ` 81.40 Lakhs during the current quarter and the balance of ` 488.38 Lakhs will be amortised over the next six quarters. | ||||||
12 | Previous period / year figures have been regrouped / reclassified, where necessary to conform to current period classification. | ||||||
SHYAM SRINIVASAN | |||||||
Kochi | MANAGING DIRECTOR & CEO | ||||||
20th October, 2015 | (DIN: 02274773) | ||||||