Federal Bank shares plunge 6% despite 67% surge in Q4 profit, dividend announcement

Shares of Federal Bank took a beating, falling over 7 per cent in Friday's trade after the lender reported a strong profit growth, an improvement in asset quality but a sequential fall in net interest margin (NIM). Federal Bank said its profit grew 66.98 per cent year-on-year (YoY) at Rs 902.61 crore, a record, for the March quarter. The bank had reported a profit of Rs 540.54 crore in the same quarter last year.

Federal Bank said its net interest income (NII) for the quarter rose 25.18 per cent YoY to Rs 1,909.29 crore from Rs 1,525.21 crore in the corresponding quarter last year. Net interest margin (NIM) for the quarter stood at 3.31 per cent against 3.49 per cent in December and 3.16 per cent in the year-ago quarter.

Following the results announcement, shares of Federal Bank plunged 7 per cent to Rs 129.35 level on BSE. Jhunjhunwala family held about 3.5 per cent stake in this bank as of March 31, shareholding data suggests.

Gross non-performing assets (NPAs) as percentage of total advances for the quarter came in at 2.35 per cent against 2.42 per cent in the December quarter and 2.78 per cent in the year-ago quarter, as per Federal Bank filing.

Total advances for the quarter jumped 20.14 per cent YoY while total deposits were up 17 per cent YoY, the bank said in a BSE filing.

Managing Director & CEO Shyam Srinivasan said: “We have delivered industry leading outcomes with net profit at Rs 903 crore and ROE at an all-time high of 17.48 per cent. The consistent performance exhibited throughout the year has yielded in net annual profits of Rs 3,010.59 crore while maintaining benign asset quality across the segments," he said.

Srinivasan said the bank's market share gains across product categories is gathering momentum.

The bank board has recommended a final dividend Re 1 per equity share of the face value Rs 2 each for FY23.

Also read: 3 takeaways from IT sector Q4 results. Infosys, HCL Tech best stock picks, says Kotak

Also read: HDFC Bank merged entity may see $150-200 million outflows on MSCI tweak, says Nuvama

Also Watch: HDFC Bank, HDFC share price tanks as MSCI assigns lower weight for merged entity; check details

Also Watch: From TV Narendran to Praveer Sinha: How Tata Group companies’ CEOs are transforming the conglomerate