Federal Bank on Wednesday posted an 8.2 percent decline in net profit to Rs 404.10 crore for the third quarter ended December 2020, mainly due to higher provisioning for bad loans. The private sector lender had registered a profit of Rs 440.64 crore in the year-ago period.

Total income, however, improved to Rs 3,941.36 crore during the third quarter as against Rs 3,738.22 crore a year ago, Federal Bank said in a regulatory filing. Gross non-performing assets (NPAs) declined to 2.71 percent of the total advances during the quarter, compared to 2.99 percent at the end of the third quarter of 2019-20.

Net NPAs of the bank also fell to 0.60 percent of the total assets in October-December 2020 as against 1.63 percent a year ago. Despite the decline in bad loans, provisions other than tax and contingencies increased more than two-fold to Rs 420.62 crore as against Rs 160.86 crore during the same period last fiscal.