Federal Bank's 3QFY16 result was way below our and street estimates due to sharp increase in fresh slippages during the quarter along with substantial increase in C/I ratio. Total fresh slippages in 3QFY16 stood at Rs5.7bn (slippage ratio of 4.5%) v/s Rs4.1bn in 2QFY16 and Rs2.3bn in 3QFY15. Higher slippages were owing to the increased slippages from SME and corporate loan portfolios. Provision coverage ratio also deteriorated to 48% v/s 55% in 2QFY16 and 68.8% in 3QFY15 due to considerably higher slippages coupled with lower provision. Business growth remained subdued as loan grew by mere 2.9% YTD and 9.8% yoy. As a result,...