Federal Bank Ltd. share price target

Federal Bank (FB) reported better than expected Q2FY21 performance on the operational front with uptick in NIMs, strong fee income and improved C-I leading PPOP growth of 40/8% YoY/QoQ to Rs 10,065mn.

Federal Bank's asset quality remains stable with GNPA at 3.0% vs 2.96% QoQ, if adjusted for slippages of Rs.2.37bn which was not treated as GNPA due to supreme court decision. Bank reported collection efficiency at 95% in September month which needs to be observed for sustainability in H2FY21. Credit growth was lower at 6% YoY (vs 8% Q1FY21) due to repayments in corporate book (down 5% YoY). Net Interest Income grew by 23% YoY led by improvement in NIMs, while PAT declined by 26% YoY due to higher provisions (up 135% YoY; Rs4bn Covid-19). Operating profit grew by 40% YoY driven by improvement in cost to income ratio. NIMs improved sequentially to...

Despite robust growth in operating profit (40% YoY), Federal Bank's (FB) Q2FY21 PAT declined 26% YoY to Rs 3.1bn as the standard asset provision buffer was raised to ~0.5% of loans (vs. ~0.2% in Q1).

Federal Bank (FB) in its business update for the quarter ended September 2020 reported an overall stable performance with growth in business/loans/deposits at 9.6/6.4/12.3% YoY and 1.3/1.4/1.2% QoQ amidst the Covid-19 crisis.