Mumbai, Jan 17 (PTI) South-based Federal Bank Thursday reported a 28.31 per cent uptick in December quarter net at Rs 333.63 crore on a rise in non-core income.Also Read - Why Some States Witness Rise in COVID Cases Again? Lockdown Relaxation Main Reason, Says Centre

The private sector lender had reported a post tax profit of Rs 260 crore in the year ago period. Also Read - Complete Lockdown in Kerala on THESE Dates Due to Rising Covid Cases. Check Details

Its core net interest income went up by 13.40 per cent to Rs 1,077.29 crore on back of a dip in net interest margin to 3.17 per cent as compared to 3.3 per cent in the year-ago, even though the loan growth came at 24.61 per cent growth. Also Read - Kerala Covid Situation Worsens as Tally Crosses 20,000 For 2nd Day, Centre Intervenes | Highlights

Its managing director and chief executive Shyam Srinivasan explained even though the margins are down as compared to last year, it is steadily moving up over the last three quarters.

The non-interest income for the bank moved up by over 51 per cent to Rs 345 crore from the Rs 228.63 crore on the back of a healthy rise in the trading gains as the yields went down amid expectations of pause in rate hikes or cuts as well.

However, the drop in yields resulted in a Rs 30 crore jump in provisions towards pensions, its executive director Ashutosh Khajuria told reporters.

The overall provisions moved up to Rs 190.12 crore from the year-ago’s Rs 162 crore and Srinivasan added that the bank has upped the buffers for two bad assets resulting in the overall provisioning coverage ratio moving up to 68 per cent.

The bank is targeting to continue raising the PCR and take it up to 70 per cent in a year’s time.

Its slippages during the quarter came at Rs 426 crore, which is Rs 60 crore lower than the preceding quarter, while the management said that the entire impact of the Kerala floods has been factored in.

Srinivasan said the RBI’s special dispensation for MSMEs announced earlier this month has the potential to reduce its slippages by up to Rs 120 crore.

The gross non-performing assets ratio moved up to 3.14 per cent from the 2.52 per cent.

Newer segments for the bank, like personal loans, auto loans and home loans grew at a faster clip on a lower base, while the ones to corporates were up by 30 per cent fuelled by working capital demand.

Srinivasan said the bank has reduced its exposures to the troubled non bank lending segment by Rs 500 crore by not renewing loans, which has seen the sector’s contribution to the overall loan book decline to 10 per cent from the earlier 12 per cent level.

He said the bank does not have any exposure to the troubled carrier Jet Airways, and added that the one to IL&FS is limited to three loans totalling Rs 245 crore given to special purpose vehicles which is performing well.

Investors were not enthused with the bank’s numbers and the scrip shed 3.01 per cent to close at Rs 88.65 a piece on the BSE as against gains of 0.15 per cent on the benchmark.

This is published unedited from the PTI feed.