MOSL: FEDERAL BANK (Buy)-Business growth moderates; asset quality marginally under pressure
FEDERAL BANK: Business growth moderates; asset quality marginally under pressure
(FB IN, Mkt Cap USD2.3b, CMP INR82, TP INR110, 34% Upside, Buy)
- PAT increased 57% YoY to INR4.2b (our estimate: INR4.4b) in 2QFY20 on the back of a lower tax rate, even as employee expense increased by 43% YoY due to retiral/wage provisions. PBT grew 14% YoY to INR4.7b. For 1HFY20, PPoP/PAT was up 16%/52% YoY to INR15b/INR8b.
- NII growth moderated to 10% YoY (INR11.2b), affected by interest reversals, yields compression on loans linked to T-bill, and negative carry due to excess liquidity. NIM thus moderated by 14bp QoQ to ~3.0%.
- Other income grew 30% YoY, led by a significant rise of 27% YoY in fee income. Total income growth (15% YoY) trailed opex growth, resulting in muted 3% YoY growth in PPoP, while the C/I ratio was up ~410bp QoQ to 53.5%.
Federal Bank is a commercial banking entity based in India. Co. is engaged in offering its customers private and commercial banking, leasing and merchant banking services, through its head office in Aluva and its 422 branches. Co. maintains a full range of delivery channels including, Internet Banking, Mobile Banking and Alerts, Any Where (Branch) Banking, Interconnected Visa enabled ATM network, E-mail Alerts, Telephone Banking and a Centralised customer Call Centre with toll free number. Co. offers its customers 24 hour banking service from various service channels. As of Mar 31 2003, Co.'s total assets and deposits amounted to IRs122,011,685,000 and IRs109,460,167,000, respectively.
Motilal Oswal Financial Services Ltd. is a reputed name in Financial Services and Online Trading with group companies providing services such as Private Wealth Management, Retail Broking and Distribution, Institutional Broking, Asset Management, Investment Banking, Private Equity, Commodity Broking, Currency Broking, Principal Strategies & Home Finance.
Motilal Oswal Securities is a group company of Motilal Oswal Financial Service Limited which started as a stock trading company and has blossomed into well diversified firm offering a range of financial products and services. Motilal Oswal has built a reputation as the source for best stock trading company and this has taken a wealth of experience, knowledge and expertise, constantly working in tandem, over the years.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.