3% of Federal Bank Loans Looking to be recast under the RBI Scheme. Federal Bank has reported a 26% year-on-year (y-o-y) fall in net profit
A number of large, small and medium banks have suffered through the slowing economy due to the pandemic induced lockdown.
Federal Bank has reported a 26% year-on-year (y-o-y) fall in net profit on higher provisioning. It has dropped to a worrisome 308 crores against 417 crores from the previous year. RBI scheme is the best out there.
The Bank stated that it is expecting 2.5-3 per cent of its loan book get recast under the RBI scheme. “Of the ₹3,500 crore of restructuring, less than a third will be corporate, and the balance will be retail, small business, and commercial loans. The bank has already made a 10% provision in the current quarter,” Shyam Srinivasan, managing director and chief executive, Federal Bank added on an optimistic note in an interview.
Currently, the bank’s Gross Non-Performing Assets (NPAs) stand at 2.84 per cent. The same was at 3.07% a year ago.
The bank is anticipating another quarter’s worth activities before Credit starts picking up. Meanwhile, the bank showed an increase of 24% in Gold Loans and 12.3% growth on deposits y-o-y.
The bank’s capital adequacy stood at 14.6% at the end of September 2020. The management said it does not aim to raise capital in the short term.
