Private sector lender Federal Bank posted a 8.9 per cent drop in profit before tax (PBT) at Rs 537.76 crore for Q1FY21 predominantly on a rise in provisions and contingencies. It had posted a profit before tax of Rs 590.72 crore in quarter ended June 2019 (Q1FY20).

The bank's stock closed 2.45 per cent lower at Rs 49.85 per share on BSE.

Its net profit for the quarter under review rose to Rs 400.77 crore compared to a net profit of Rs 384.21 crore in Q1FY20.

The bank's Net Interest Income (NII) grew 12.33 per cent on a year-on-year basis from Rs 1,154.18 crore in Q1FY20 to Rs 1,296.44 crore in Q1FY21. Other income comprising fees, commissions etc grew by 24.74 per cent to Rs 488.37 crore in Q1FY21.

The provisions (including for NPAs) and contingencies more than doubled to Rs 394.62 crore in Q1FY21 from Rs 192.04 crore in Q1FY20. The provision coverage ratio (PCR), including technical write-offs, of Federal Bank stood at 75.09 per cent at the end of June 2020.

Referring to the impact of the Covid-19 pandemic, the bank's managing director and chief executive Shyam Srinivasan said that the aggregate provision against the likely impact of the Covid-19 pandemic stood at Rs 1,863 crore as on June 30, 2020. The amount of loans under moratorium stood at 24 per cent by value, down from 35 per cent few months ago.

The asset quality of the bank improved during the first quarter. The Gross Non-Performing Assets (GNPAs) declined to 2.96 per cent in Q1FY21 from 2.99 per cent in Q1FY20. The net NPAs were at 1.22 per cent in June 2020 down from 1.49 per cent in June 2019.

The total deposits rose by 17 per cent at Rs 1,54,937 crore and net advances grew by 8.27 per cent y-o-y to reach Rs 1,21,296 crore as on June 30, 2020.

The lender's Capital Adequacy Ratio (CAR) stood at 14.17 per cent as on June 30, 2020 with Tier I at 13 per cent. The Kerala-based Bank does not envisage capital raising activity in the near future and would continue to evaluate options, Srinivasan said.