The Hindu : Business : Federal Bank's operating profit up by 13 per cent

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Saturday, May 20, 2006

Business

Business

Federal Bank's operating profit up by 13 per cent

Staff Reporter

Net profit jumps by 150 per cent

— PHOTO: Vipin Chandran

BETS ON SMES: Federal Bank Chairman M. Venugopalan, announcing the financial results of the bank at a press conference in Kochi on Friday.

KOCHI: The operating profit of Federal Bank in 2005-06 has gone up by 12.93 per cent to Rs. 452.18 crores from Rs. 400.4 crores in the previous financial year.

The net profit for the financial year was Rs. 225.21 crores, up by 149.98 per cent, against Rs. 90.09 crores reported in 2004-05. The net non-performing assets (NPA) of the bank have decreased to 0.95 per cent from 2.21 per cent.

This was announced by bank Chairman M. Venugopalan at a press conference here on Friday after a meeting of the Board of Directors, which approved the audited financial results.

For the fourth quarter ended March 31, the bank earned a total income of Rs. 460.04 crores as against Rs. 347.95 crores for the corresponding quarter of 2004-05. The interest income increased from Rs. 291.01 crores to Rs. 390.31 crores from the corresponding quarter in 2004-05. The net profit of the quarter ended March 31 went up by 69.89 per cent.

During the financial year, the bank earned a total income of Rs. 1,653.48 crores, registering a growth of 17.85 per cent, as against Rs. 1,403.01 crores in the previous year. The interest income from advances and investments grew by 18.54 per cent and 20.9 per cent, respectively. The net interest income was up by 19.42 per cent.

The total net worth of the bank as on March 31 stood at Rs. 1,249.99 crores. The capital adequacy ratio as on March 31 is 13.75 per cent.

The business per employee and profit per employee as on March 31 has improved to Rs. 431 lakhs and Rs. 3.54 lakhs, respectively, from Rs. 366 lakhs and Rs. 1.39 lakh of a year ago. The earnings per share as on March 31, 2006 increased to Rs. 32.71 as against Rs. 13.13 as on March 31, 2005.

During the fiscal, the bank added 16 new branches and 66 ATMs, increasing the bank's presence through 472 branches and 320 ATMs in all important centres across 23 States in India. During the current fiscal, the bank proposes to add another 58 branches.

The bank has already obtained permission to open another 29 branches, of which 12 are in Kerala.

The bank will open its representative office in the UAE soon. This will help its penetration in the NRI segment. Mr. Venugopalan said the bank was keen on acquisitions, but did not disclose if there was any specific proposal in this regard.

The Chairman said the bank had drawn up a strategic plan to reach a business of Rs. 1,00,000 crores by 2010-11.

The bank has identified its future growth to come from small and medium enterprises and retail segments. With extensive tie-up arrangements with various agencies, the bank is projecting a credit growth of 30 per cent for the current fiscal.

The bank is in the process of shifting its entire branches and operations to core banking solutions and the entire operation is expected to be under the new module by March 2007.

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