The lower provisions are in sync with asset quality improvement which is the prevalent trend in the banking sector in the last two quarters.
The private sector lender set aside Rs 75 crore towards provisions and contingencies in the March quarter which was 71% lower than Rs 255 crore provision it had made in the year-ago quarter.
Its net interest margin for the quarter was 2.96% against 1.64% a year back but lower than third quarter’s 3.11%. Net interest income grew 7% year-on-year at Rs 1,525 crore but was lower than market expectation.
Other income was a tad lower at Rs 465 crore against Rs 478 crore primarily due to lower treasury income.
Operating profit was 11% lower at Rs Rs 798 crore, impacted by family pension cost and loss on revaluation of security receipts, the bank said.
Its advances grew 9% year-on-year to Rs 1.48 lakh crore with gross non-performing assets ratio being at 2.8% against 3.41% a year back. Net NPA was at 0.96% against 1.19%.
“I see credit growth picking up early this year because people will chase lower rates before rates go up further,” managing director Shyam Srinivasan said. The RBI has started tightening the money flow to curb runaway inflation caused by the global supply chain disruption following the Russia-Ukraine war and the resultant economic sanctions on the Russian economy.
The Federal Bank board recommended a final dividend of Rs 1.80 per equity share of the face value Rs 2 each for FY22.