Private sector lender Federal Bank Friday reported a 50 percent jump in its standalone profit after tax (PAT) at Rs 460.26 crore in the quarter ended September 2021 as against Rs 307.62 crore in the corresponding quarter of the previous fiscal.

Reflecting on the bank’s growth, managing director and chief executive officer Shyam Srinivasan said it has been a good quarter. “Growth cannot be independent of the environment, we grew higher than the average, we grew higher than most players. So I think, we've always been quite modest of what our growth aspirations are relevant to the market. We grew 10 percent year-on-year, usually, the second half is a little more buoyant, and we are seeing encouraging signs across the spectrum. So growing in the second half, anywhere in the early teens is very possible,” he said.

He added that it is a mixed bag because retail, commercial banking, business banking are growing at a healthier cliff, whereas corporate tends to be choppy.

Read Here: Federal Bank Q2 results: Net profit rises 50% to Rs 460 crore

Since he doesn’t want to compromise on either quality or pricing, Srinivasan said, to that extent, the blended growth maybe somewhere in the early 10, 12 or 13 percent but there will be segments that grow well into the 20s.”

With regards to loan growth, he said corporate for at least the last 12-18 months has been more around, they have had opportunities to get credit at a much lower rate through other instruments.

“It has been a pricing nuclear war so to say. So, we have been cautious about where it grew. Though in Q2 per se for the quarter, we grew almost annualised 10 percent corporate after a long time,” he said.

According to Srinivasan, that will continue till big-ticket investments kick in, which could be from March of 22 or beyond. He said that he doesn’t see any big investments coming at present so there will be opportunities but at scale.

He added commercial banking and business banking, for the quarter that went by grew at 12 percent annualised and he sees that as a very good sign because it had been shrinking for quite some time.

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On opportunities in digital channel, Srinivasan said, “We have been saying for long that we are a branch light distribution heavy bank, and we latched on to this whole digital, and partnership with fintechs in a very aggressive fashion. We probably are the leading bank in terms of fintech partnerships.

He said that over 50 percent of the bank’s new acquisition and of its new clients are now fintech. So the transition, which is very evident, is giving the bank access to a new set of clients that normally it may not have in an ordinary course of business, he explained. According to him, the bank’s technology stack is something that is inviting all its fintech partners.

“Our branch network is at 1,280 branches, we are probably the only bank that hasn't added branches at scale after 2016. But our business has more than doubled. Our business has more than doubled and at this point, as I speak to it, probably 50 percent of our new acquisition. We did about three lakh accounts through the Neobank partnerships over the last, say three-four months and that should, as things stabilise and our capabilities increase, as customer confidence increases, should grow even more aggressively.”

Federal Bank’s net interest income (NII) grew by 7 percent to Rs 1,479.42 crore in Q2 FY22 from Rs 1,379.85 crore in the year-ago quarter. Net interest margin (NIM) stood at 3.20 percent as on September 30, 2021. The gross non-performing assets (GNPAs) stood 3.24 percent as against 2.84 percent. Net NPAs was at 1.12 percent compared to 0.99 percent in the year-ago quarter.

For the full management commentary, watch the video.

-With PTI inputs

(Edited by : Kanishka Sarkar)