NEW DELHI: Private sector lender Federal Bank on Friday reported a 26 per cent year-on-year decline in its net profit as the bank stepped up provisions to deal with a likely rise in slippages due to the disruptions caused by the COVID-19 pandemic.
Profit for the quarter ended September stood at Rs 308 crore as against Rs. 417 crore a year ago. During this period, the bank more than doubled provisions for bad loans and contingencies to Rs 592 crore. However, asset quality improved with gross non-performing assets (NPA) falling sequentially to 2.84 per cent in Q2FY21, while net NPA declined to 0.99 per cent.
Due to the moratorium on loans, a mere Rs 3 crore of loans slipped into NPAs, said CEO Shyam Srinivasan, adding if not for the moratorium about Rs 237 crore worth of loans would have slipped into NPAs.