Federal Bank Shares Slump 13% As Net profits Fall

Business

oi-Sunil

By Sunil Fernandes

Published: Wednesday, October 21, 2015, 9:58 [IST]

Shares in Federal Bank fell a huge 15 per cent after its net profits plunged. The shares were last trading at Rs 57, after dropping to a 52-week low of Rs 55 on the National Stock Exchange.

The bank reported a sharp drop in net profits by a huge 33 per cent for the quarter ending June 30, 2015. The net profits came in at Rs 161.28 crore as against of Rs 240.30 crores in the previous quarter.

Analysts had largely expected net profits of near Rs 290 crores and the profits were a major disappointment.

Gross non-performing assets also deteriorated at 2.9 per cent in Q2, as compared with 2.1 per cent, net NPAs on the other hand rose to 1.33 per cent from 0.66 per cent.

Analysts are closely watching the results of major banks to see if there is a further deterioration in asset quality. It is expected that the top major private banking names, may not have too much of a worry. The real challenge would come from the government owned banks.

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