Annual Financial Results

B S R & Co. LLP

M.M. Nissim & Co.

Chartered Accountants

Chartered Accountants

5th Floor, Lodha Excelus

Barodawala Mansion, B-Wing,

Apollo Mills Compound

3rd Floor, 81,

N.M. Joshi Marg, Mahalaxmi

Dr. Annie Besant Road,

Mumbai- 400 011

Worli, Mumbai- 400 018

B S R & Co. LLP

M.M. Nissim & Co.

Chartered Accountants

Chartered Accountants

5th Floor, Lodha Excelus

Barodawala Mansion, B-Wing,

Apollo Mills Compound

3rd Floor, 81,

N.M. Joshi Marg, Mahalaxmi

Dr. Annie Besant Road,

Mumbai- 400 011

Worli, Mumbai- 400 018

For B S R & Co. LLP

For M.M. Nissim & Co.

Chartered Accountants

Chartered Accountants

Firm's Registration No: 101248W / W-100022

Firm's Registration No: 107122W

Venkataramanan Vishwanath

Sanjay Khemani

Partner

Partner

Membership No: 113156

Membership No: 044577

Mumbai

Kochi

28 April 2017

28 April 2017

THE FEDERAL BANK LIMITED

REGD.OFFICE: P.B.NO. 103, FEDERAL TOWERS, ALUVA-683101

(CIN: L65191KL1931PLC000368)

AUDITED FINANCIAL RESULTS FOR THE QUARTER AND YEAR ENDED MARCH 31, 2017

 (` in Lakhs)

Particulars

Quarter ended

Year ended

Consolidated figures for the year ended

31.03.2017

31.12.2016

31.03.2016

31.03.2017

31.03.2016

31.03.2017

31.03.2016

Audited(Refer Note 12 below)

Unaudited

Audited(Refer Note 12 below)

Audited

Audited

Audited

Audited

1. Interest earned (a)+(b)+(c)+(d)

231,595

228,142

202,667

867,739

774,815

878,327

782,626

(a)

Interest/discount on advances/bills

173,644

171,622

146,949

654,568

566,931

665,610

574,818

(b)

Income on investments

48,382

45,122

45,996

180,140

176,309

179,686

176,233

(c)

Interest on balances with Reserve Bank of India and other inter bank funds

3,598

3,494

725

9,893

5,596

9,893

5,596

(d)

Others

5,971

7,904

8,997

23,138

25,979

23,138

25,979

2. Other Income

28,211

27,467

23,627

108,181

80,820

108,377

80,837

3. TOTAL INCOME (1+2)

259,806

255,609

226,294

975,920

855,635

986,704

863,463

4. Interest expended

147,356

149,003

134,058

562,475

524,045

565,258

525,935

5. Operating expenses (i)+(ii)

57,529

59,116

52,784

220,954

189,212

225,250

193,160

(i)

Employees cost

26,303

31,972

29,304

116,375

105,285

118,934

107,422

(ii)

Other operating expenses

31,226

27,144

23,480

104,579

83,927

106,316

85,738

6. TOTAL EXPENDITURE (4+5)(excluding provisions and contingencies)

204,885

208,119

186,842

783,429

713,257

790,508

719,095

7. OPERATING PROFIT (3-6) (Profit before provisions and contingencies)

54,921

47,490

39,452

192,491

142,378

196,196

144,368

8. Provisions (other than Tax) and Contingencies

12,270

15,882

38,864

61,841

70,413

61,999

70,517

9. Exceptional Items

-

-

-

-

-

-

-

10. Profit from Ordinary Activities before tax (7-8-9)

42,651

31,608

588

130,650

71,965

134,197

73,851

11. Tax expense

16,992

11,043

(438)

47,571

24,400

48,866

25,061

12. Net Profit from Ordinary Activities after tax (10-11)

25,659

20,565

1,026

83,079

47,565

85,331

48,790

13. Extraordinary items (net of tax expense)

-

-

-

-

-

-

-

14. Net Profit for the period (12-13)

25,659

20,565

1,026

83,079

47,565

85,331

48,790

15. Share in Profit/(Loss) of Associate

1,355

(148)

16. Consolidated Net Profit of the group (14+15)

86,686

48,642

17. Paid-up Equity Share Capital(Face value ` 2/- per Equity Share)

34,481

34,443

34,379

34,481

34,379

34,481

34,379

18. Reserves excluding Revaluation Reserve

859,256

774,242

860,155

771,533

19. Analytical Ratios

(i)

Percentage of shares held by Government of India

NIL

NIL

NIL

NIL

NIL

NIL

NIL

(ii)

Capital Adequacy ratio (%)

Under Basel III

12.39

12.28

13.93

12.39

13.93

-

-

(iii)

Earnings per Share (EPS) (in `)

(a) Basic EPS (before and after extra ordinary items)

1.49*

1.20*

0.06*

4.83

2.77

5.04

2.83

(b) Diluted EPS (before and after extra ordinary items)

1.46*

1.18*

0.06*

4.76

2.75

4.96

2.82

(iv)

NPA Ratios

a) Gross NPA

172,705

195,155

166,777

172,705

166,777

b) Net NPA

94,120

110,237

95,001

94,120

95,001

c) % of Gross NPA

2.33

2.77

2.84

2.33

2.84

d) % of Net NPA

1.28

1.58

1.64

1.28

1.64

(v)

Return on Assets (%)

 0.24 *

0.20 *

 0.01*

0.84

0.57

* Not Annualised

Segment Information@

 (` in Lakhs)

Particulars

Quarter ended

Year ended

Consolidated figures for the year ended

31.03.2017

31.12.2016

31.03.2016

31.03.2017

31.03.2016

31.03.2017

31.03.2016

Audited(Refer Note 12 below)

Unaudited

Audited(Refer Note 12 below)

Audited

Audited

Audited

Audited

Segment Revenue:

Treasury

63,666

65,168

59,193

249,634

228,193

249,634

228,193

Corporate/Wholesale Banking

84,065

68,739

67,702

300,671

236,094

300,671

236,094

Retail Banking

107,372

116,437

92,787

410,350

380,964

421,134

388,792

Other Banking operations

4,703

5,265

6,612

15,265

10,384

15,265

10,384

Unallocated

-

-

-

-

-

-

-

Total Revenue

259,806

255,609

226,294

975,920

855,635

986,704

863,463

Less: Inter Segment Revenue

-

-

-

-

-

-

-

Income from Operations

259,806

255,609

226,294

975,920

855,635

986,704

863,463

Segment Results (net of provisions):

Treasury

6,956

8,779

3,172

39,514

15,852

39,514

15,851

Corporate/Wholesale Banking

12,044

4,062

(5,324)

19,641

1,814

19,641

1,814

Retail Banking

23,211

17,222

(2,062)

68,799

49,459

72,346

51,345

Other Banking operations

1,256

2,386

5,532

5,603

7,385

5,603

7,385

Unallocated

(816)

(841)

(730)

(2,907)

(2,545)

(2,907)

(2,544)

Profit before tax

42,651

31,608

588

130,650

71,965

134,197

73,851

Segment Assets

Treasury

3,900,028

3,813,929

3,334,198

3,900,028

3,334,198

3,896,880

3,329,695

Corporate/Wholesale Banking

3,138,461

3,400,648

2,483,667

3,138,461

2,483,667

3,138,461

2,483,667

Retail Banking

4,241,722

3,645,243

3,371,086

4,241,722

3,371,086

4,295,750

3,388,024

Other Banking operations

1,854

4,398

2,656

1,854

2,656

1,854

2,656

Unallocated

215,628

285,520

245,196

215,628

245,196

215,628

245,196

Total

11,497,693

11,149,738

9,436,803

11,497,693

9,436,803

11,548,573

9,449,238

Segment Liabilities

Treasury

3,618,865

3,510,701

3,067,275

3,618,865

3,067,275

3,618,865

3,067,275

Corporate/Wholesale Banking

2,950,151

3,259,778

2,337,684

2,950,151

2,337,684

2,950,151

2,337,684

Retail Banking

3,992,625

3,500,018

3,178,818

3,992,625

3,178,818

4,042,607

3,193,963

Other Banking operations

-

-

-

-

-

-

-

Unallocated

41,814

11,396

43,904

41,814

43,904

41,814

43,904

Total

10,603,455

10,281,893

8,627,681

10,603,455

8,627,681

10,653,437

8,642,826

Capital employed:

(Segment Assets - Segment Liabilities)

Treasury

281,163

303,228

266,923

281,163

266,923

278,015

262,420

Corporate/Wholesale Banking

188,310

140,870

145,983

188,310

145,983

188,310

145,983

Retail Banking

249,097

145,225

192,268

249,097

192,268

253,143

194,061

Other Banking operations

1,854

4,398

2,656

1,854

2,656

1,854

2,656

Unallocated

173,814

274,124

201,292

173,814

201,292

173,814

201,292

Total

894,238

867,845

809,122

894,238

809,122

895,136

806,412

@

For the above segment reporting, the reportable segments are identified into Treasury, Corporate/Wholesale Banking, Retail Banking and Other Banking Operations in compliance with the RBI guidelines.

Statement of Assets and Liabilities of the bank as on March 31, 2017 is given below:

(` in Lakhs)

Particulars

Standalone

Consolidated

As at 31.03.2017

As at 31.03.2016

As at 31.03.2017

As at 31.03.2016

Audited

Audited

Audited

Audited

CAPITAL AND LIABILITIES

Capital

34,481

34,379

34,481

34,379

Reserves and Surplus

859,757

774,743

860,655

772,033

Deposits

9,766,456

7,917,171

9,766,208

7,917,090

Borrowings

589,732

511,456

634,549

523,632

Other Liabilities and Provisions

247,267

220,388

252,680

223,439

Total

11,497,693

9,458,137

11,548,573

9,470,573

ASSETS

Cash and Balances with Reserve Bank of India

457,657

377,454

457,827

377,696

Balance with Banks and Money at Call and Short Notice

287,560

164,527

287,637

164,618

Investments

2,819,609

2,515,549

2,791,226

2,492,047

Advances

7,333,627

5,809,014

7,408,623

5,841,977

Fixed Assets

48,947

51,998

49,234

52,364

Other Assets

550,293

539,595

554,026

541,871

Total

11,497,693

9,458,137

11,548,573

9,470,573

Notes:

1

The above Audited Financial Results for the quarter and year ended March 31, 2017 were reviewed by the Audit Committee and approved by the Board of Directors at its meeting held on April 28, 2017. These Results have been subjected to "Audit" by the Statutory Central Auditors of the Bank and an unqualified report has been issued by them.

2

The Bank has made provision for Non Performing Assets as stipulated under Reserve Bank of India (RBI) norms. Further, provision for standard assets including requirements for exposures to entities with Unhedged Foreign Currency Exposures and provision for restructured advances have been made as per RBI guidelines.

3

In accordance with RBI Circular DBR.No.BP.BC.1/21.06.201/2015-16 on Basel III Capital Regulations dated July 01, 2015 and RBI Circular DBR.No.BP.BC.80/21.06.201/2014-15 dated March 31, 2015 - 'Prudential Guidelines on Capital Adequacy and Liquidity Standards - amendments', Banks are required to make Pillar 3 disclosure requirements including Leverage Ratio disclosure requirements that are to be made along with the publication of Financial Results. Accordingly, such applicable disclosures have been placed on the website of the Bank which can be accessed at the following link: http://www.federalbank.co.in/regulatory-disclosures. These disclosures have not been subjected to review by the Statutory Central Auditors of the Bank.

4

The divergence observed by RBI for the Financial year 2015-16 in respect of the Bank's asset classification and provisioning under the extant prudential norms on income recognition, asset classification and provisioning is insignificant and hence the disclosure in the Notes to the Audited Financial Statements for the year ended 31 March 2017, as required under RBI Circular DBR.BP.BC.No.63/21.04.018/2016-17 dated April 18, 2017 on 'Divergence in the asset classification and provisioning', is not required to be made.

5

The Business operations of the Bank are largely concentrated in India and for purpose of Segmental reporting, the bank considered to operate only in domestic segment, though the bank has its operation in International Finance Service Centre (IFSC) Banking Unit in Gujarat International Finance Tec-city (GIFT). The business conducted from the same is considered as a part of Indian operations.

6

Other income includes fees earned from providing services to customers, commission from non-fund based banking activities, earnings from foreign exchange and derivative transactions, selling of third party products, profit on sale of investments (net), recoveries from advances written off.

7

During the year ended March 31,2016, the Bank had assigned certain Non performing financial assets to Asset Reconstruction Companies. In terms of RBI Master Circular DBR.No.BP.BC.2/21.04.048/2015-16 - Prudential norms on Income Recognition, Asset Classification and Provisioning pertaining to Advances dated July 1, 2015, as amended, the shortfall arrived at by deducting sale consideration from the net book value of the financial assets, is amortised over a period of two years. Accordingly, the bank has charged to the profit and loss account an amount of ` 2,168.29 Lakhs and ` 8,673.16 Lakhs for the Quarter and year ended March 31,2017 respectively and there is no unamortised balance carried forward as on March 31, 2017.

8

During the quarter and year ended March 31,2017, the Bank allotted 19,02,809 and 50,98,570 equity shares respectively, pursuant to the exercise of stock options by certain employees.

9

Pursuant to RBI Circular FMRD.DIRD.10/14.03.002/2015-16 dated May 19, 2016, as amended, the bank has with effect from October 3, 2016 considered its repo/reverse repo transactions under Liquidity Adjustment Facility (LAF) and Marginal Standing Facility (MSF) of RBI as Borrowings/Lendings, as the case may be. Hitherto, the repo/ reverse repo transactions were included under Investments. Figures for the previous periods have been regrouped / reclassified to conform to current period's classification. The above regrouping / reclassification has no impact on the profit of the bank for the quarter / year ended March 31, 2017 or the previous periods/year.

10

The Board of Directors have recommended a dividend of 45% i.e. ` 0.90/- per Equity Share on face value of ` 2/- each for the year 2016-17 (previous year 35% i.e ` 0.70/- per Equity Share) subject to the approval of the members at the ensuing Annual General Meeting. In terms of revised Accounting Standard (AS) 4 "Contingencies and Events occuring after the Balance sheet date" as notified by the Ministry of Corporate affairs through amendments to Companies (Accounting Standards) Amendment Rules, 2016, the Bank has not appropriated proposed dividend (including tax) aggregating to ` 18,675 Lakhs from the statement of Profit and loss account for the year ended March 31, 2017. However the effect of the proposed dividend has been reckoned in determining capital funds in the computation of Capital adequacy ratio as on March 31, 2017.

11

The figures for the periods prior to September 30, 2016 were reviewed / audited by previous statutory auditors.

12

The figures of the last quarter are the balancing figures between the audited figures in respect of the full financial year and the published year to date figures upto the end of third quarter of the respective financial year.

13

Previous period's / year's figures have been regrouped / reclassified, where necessary to conform to current period's classification.

 SHYAM SRINIVASAN

Kochi

 MANAGING DIRECTOR & CEO

April 28, 2017

 (DIN: 02274773)