Federal Bank Ltd. share price target

moratorium loans which have cleared all interests/EMIs Gold loans/loans against liquid securities. Business banking and commercial banking has the highest proportion of 42% and 35% presentation on the moratorium book gives us the confidence to estimate the future asset quality outlook. We estimate FY21E GNPA ratio of 3.2% & NNPA ratio at 1.8% against the current level of...

Federal Bank Ltd is an Indian commercial bank in the private sector headquartered in Kerala having 1,263 branches and 1,936 ATM/ Recyclers and a loan book size of ~Rs1,23,437cr. We roll forward our valuation to FY22E and maintain Buy rating on...

Federal Bank's asset quality deteriorated slightly with GNPA inches up by 12bps QoQ to 2.96% as, conservatively one corporate account (UAE exchange exposure of Rs.1.7bn) treated as NPA during the quarter. Credit growth declined to 8% YoY (vs 11% FY20) due to complete lockdown situation in first 2 months of the quarter (Q1FY21). Net Interest Income grew by 12% YoY led by improvement in NIMs, while PAT grew at a lower rate of 4% YoY due to higher provisions (up 105% YoY; Rs930mn Covid-19). Operating profit grew by 15.5% YoY driven by a 24% growth in Non-Interest Income. NIMs improved sequentially to 3.07%, while cost to income ratio improved by 246bps QoQ to 47.8%....

Federal Bank reported better than expected Q1FY21 performance on steady NIMs (~3.1%) and improved C-I (47.8%). Loan book was up 8.5% YoY and down 0.8% QoQ. NII was up 12/6% YoY/QoQ led by NIMs on account of better business mix. Higher treasury gains led to improvement in other income up 25% YoY

15 July 2020 Federal Banks (FB) PAT was higher than our estimates supported by treasury gains. However, core fee income declined sharply impacted by the lockdown and tepid loan growth. We have fine-tuned our FY21/FY22E estimates as we have moderated our fee growth assumptions and slightly increased business growth projections. 1QFY21 PAT stood at INR4.0b (~+4% YoY/+33% QoQ) significantly ahead of our estimates, mainly led by treasury gains of INR3b. The bank has prudently used the treasury gains to improve provisioning coverage and carries total COVID provisions of ~INR1.9b. NII grew 12% YoY (~INR13b) as margins increased 3bp QoQ to ~3.07%. Core fee income declined 32% YoY affected by the lockdown while higher treasury income resulted in total income growth of ~25% YoY. Opex grew ~12% YoY led by additional pension cost of INR350m. PPoP, thus, grew 19% YoY to INR9.3b while core PPoP (excluding treasury gains) declined ~9% YoY.

Fresh slippages came much lower in Q1FY2021 at Rs. 184 crore, from Rs. 283 crore in Q4FY2020 and ~Rs. 450 crore per quarter for the preceding three quarters. NIMs have expanded by 3 bps q-o-q to 3.07% (but were down by 8 bps y-o-y)....

FB posted better than estimated earnings of Rs4.0bn (PLe:Rs2.6bn) led by relatively lower provisioning, lower opex and repeated gains in treasury. With lower strain on asset quality than trend levels due to moratorium and standstill slippages were at Rs1.9bn (middle east a/c under stress) and PCR moved up by 510bps to ~60% which was a expected outcome. Key...

Federal Bank (FB) is a Kerala-based regional private sector bank incorporated on 23 April, 1931 as the Travancore Federal Bank Limited. The bank has a presence in ~25 states, the National Capital Territory of Delhi and four union territories.

Federal Bank reported a mixed set of Q4FY20 numbers wherein the operational performance was healthy due to other income one offs but a surge in provisioning dented PAT growth. As on May 25, 2020, 35% of borrowers by value opted for the moratorium with retail customers comprising a majority. Total provisioning for the quarter was at | 567 crore (~46 bps of advances), which includes Covid-19 provisioning of | 93 crore (RBI requirement of | 30.3 crore). The bank has reported Covid-19 impact on loss of revenues and recoveries to the extent...

Operating performance of Federal Bank (FB) was higher than expectations on account of higher treasury gains. Loan growth moderated to 11% YoY, led by sluggish growth in corporate/SME, while retail loans grew 19% YoY.