Federal Bank: Robust performance; RoA progression on a fast track (FB IN, Mkt Cap USD3.3b, CMP INR130, TP INR155, 19% Upside, Buy) Asset quality improves sharply FB reported a strong quarter with a PAT of INR7b (up 53% YoY and 17% beat), aided by NIM expansion and higher 'other income' even as the bank prudently increased the PCR to ~69%. Margin improved 8bp QoQ to 3.3%. Gross advances grew 19.4% YoY, led by a broad-based pickup across all business segments. Corporate grew the fastest at 2...
FEDERAL BANK (IN), a company active in the Money Center Banks industry, now shows a lower overall rating. The independent financial analyst theScreener just confirmed the fundamental rating of 3 stars out of 4, as well as the stock market behaviour of the title as moderately risky. However, environmental deterioration penalises the general evaluation, which is downgraded to Neutral. As of the analysis date February 25, 2022, the closing price was INR 96.75 and its expected value was estimated at...
Full Article at IIR has reaffirmed its Recommended rating for PIA after undertaking a review post the appointment of a new Portfolio Manager, Harding Loevner. The full report can be found on the IIR website. On 26 July 2021, Pengana International Equities Limited (PIA) announced a fully franked dividend of 1.35 cents per share for the June quarter. This represents an 8% increase on the March quarter dividend and takes the total dividends declared for FY21 of 5.1 cents per share, fully franked....
A director at The Federal Bank Limited sold 60,500 shares at 86.300INR and the significance rating of the trade was 70/100. Is that information sufficient for you to make an investment decision? This report gives details of those trades and adds context and analysis to them such that you can judge whether these trading decisions are ones worth following. Included in the report is a detailed share price chart which plots discretionary trades by all the company's directors over the last two year...
FEDERAL BANK: Asset quality broadly stable; earnings outlook getting strengthened (FB IN, Mkt Cap USD2.3b, CMP INR85, TP INR110, 29% Upside, Buy) Restructured book increases to ~1.9% of loans led by Retail FB reported a PAT of ~INR3.7b in 1QFY22, led by strong other income (recovery from a written-off account and treasury gains of INR2.6b). It prudently deployed these gains towards provisions, which stood elevated at INR6.4b (63% YoY increase), to further strengthen its Balance Sheet. T...
FEDERAL BANK: Gold loans witnessing robust traction; business granularity improving (FB IN, Mkt Cap USD2.3b, CMP INR86, TP INR110, 28% Upside, Buy) In its FY21 Annual Report, FB highlighted the progress it is making in strengthening the Balance Sheet and the focus it is laying on building its Gold loans portfolio, along with the newly launched Credit Card product. Higher focus is placed on leveraging its distribution base through the RM model, which will enable further improvement in the ...
(FB IN, Mkt Cap USD2.4b, CMP INR85, TP INR115, 35% Upside, Buy) We attended Federal Bank (FB) Analyst Day, wherein the bank discussed the recent trends and opportunities, along with the key levers for RoA expansion. ** FB has identified new revenue streams such as micro finance, credit card, CV/CE and business banking for margin expansion. It has set a target of achieving a retail:wholesale loan mix of 55:45 over the medium-to-long term. ** The bank reiterated that there is no residual stress...
FEDERAL BANK: Asset quality outlook turning better; RoA expansion to drive re-rating (FB IN, Mkt Cap USD2.6b, CMP INR93, TP INR115, 24% Upside, Buy) Liability franchise remains strong; asset mix improving Federal Bank (FB) reported a sharp decline in net stressed loans to ~2.3% of loans (-14bp QoQ) in 3QFY20, led by the resolution of a large restructured account (airline). Management expects slippages to subside further with no residual stress in corporate loans above INR1b. Also, health...
(FB IN, Mkt Cap USD2.6b, CMP INR94, TP INR115, 23% Upside, Buy) RoA expansion to continue** FB reported moderation in business growth due to the weak environment and higher repayments/stress account resolutions. Although slippages stood elevated, bulk of it came from the pre-disclosed watch-list, which resulted in an overall decline in stressed assets. ** We tweak our estimates marginally for FY21/22 and believe that the bank remains well positioned to deliver a continued improvement in RoA le...
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 ...
FEDERAL BANK: Steady quarter; RoA expansion on track (FB IN, Mkt Cap USD3.1b, CMP INR107, TP INR125, 16% Upside, Buy) FB reported 1QFY20 PAT of INR3.8b (+46% YoY, our estimate: INR3.5b), led by controlled provisions (-4% YoY to INR1.9b) and higher other income (+45% YoY). NII stood at INR11.5b (+18% YoY), which, coupled with higher other income, drove 24% YoY growth in total income. NIM shrank 2bp QoQ to 3.15%. Core fee income grew robustly by ~35% YoY to INR2.2b and was well supported b...
Federal Bank: Business momentum remains strong; return ratios to improve further (FB IN, Mkt Cap USD2.8b, CMP INR98, TP INR120, 23% Upside, Buy) 4QFY19 PAT of INR3.8b (8% ahead of our estimates) was led by controlled provisions of INR1.8b (7% QoQ decline). PPoP increased 28% YoY to INR7.5b (in line). For FY19, PPoP grew 20.6% YoY while PAT rose 42% YoY to INR12.4b. NII stood at INR10.9b (+17.5% YoY), which, coupled with 31.1% YoY growth in other income, drove 20.9% YoY growth in total reven...
FEDERAL BANK: Operational performance getting stronger; improvement in return ratios to drive re-rating (FB IN, Mkt Cap USD2.5b, CMP INR89, TP INR115, 30% Upside, Buy) Federal Bank (FB) reported PAT of INR3.3b (6% ahead of our estimate) for 3QFY19, led by controlled provisions of INR1.9b (-34% QoQ). PPoP increased 26% YoY to INR7.1b, despite the bank making MTM provisions of INR350m for pension liabilities. For 9MFY19, PPoP grew 18.0% YoY to INR20b, while PAT increased 17.5% YoY to INR8.6...
Opportunity in EM countries Our cautious outlook and expectation for continued downward pressure on global equities remains intact. Broad global indexes (MSCI ACWI, ACWI ex-U.S., EAFE, and EM) are all trading within patterns of lower highs and lower lows, leading us to believe the most likely scenario is that this near-term bounce is likely nothing more than a countertrend rally before longer-term downtrends reassert themselves. • Opportunity in EM. Both a top-down and bottoms-up analysis po...
THE CORNER OFFICE (Federal Bank) — Business momentum remains strong; Asset quality and earnings profile to improve going forward Ms Ashutosh Khajuria, ED & CFO Mr. Ashutosh Khajuria is the ED and CFO of Federal Bank. He oversees treasury, corporate planning, inspection & audit, legal and the IFSC Banking Unit (IBU) in GIFT City, Gujarat. A Science Graduate from Banaras Hindu University, he also holds a Bachelor of Law degree and a post-graduation degree in Economics. Mr. Khajuria joined ...
Federal BANK: Business momentum remains strong; asset quality concerns abating (FB IN, Mkt Cap USD2.2b, CMP INR82, TP INR105, 28% Upside, Buy) Federal Bank (FB) reported above-estimated PAT of INR2.7b in 2QFY19, led by strong other income and controlled provisions. PPoP increased 19.6% YoY (+15.7% QoQ) to INR6.9b. Our full-year estimate suggests FB should deliver PAT of INR6.1b in 2HFY19 (after INR5.3b for 1HFY19). NII stood at INR10.2b (+13.7% YoY/+4.3% QoQ, in-line), which, coupled wit...
Federal Bank: Healthy balance sheet growth continues; profitability marred by opex and provisions (fB IN, Mkt Cap USD3.1b, CMP INR101, TP INR127, 26% Upside, Buy) Federal Bank (FB) recorded PPoP growth of 5%/7% QoQ/YoY (to INR5.9b; 10% miss), as 7% beat on other income (+37%/+11% QoQ/YoY to INR3.1b) was offset by 6% miss on opex (+7%/+15% QoQ/YoY to INR6.6b) due to additional INR179m of gratuity provisions. Core PPoP growth was healthy at 6%/14% QoQ/YoY. Elevated provisions at INR3.7b (dr...
Federal Bank: Strong core operating performance; asset quality deteriorates slightly (FB IN, Mkt Cap USD3.5b, CMP INR113, TP INR149, 32% Upside, Buy) FB recorded PPoP growth of -4%/18% QoQ/YoY (INR5.6b; 4% miss), driven by a 5% miss on total income (24% beat on other income, which declined 20%/13% QoQ/YoY to INR2.29b). The impact, however, was partly offset by a 5% beat on opex, which grew 2%/4% QoQ/YoY to INR6.2b, as employee expenses fell 4%/6% QoQ/YoY. Core PPoP growth was strong at 5%/3...
​Federal Bank: Strong operating performance; Growth continues with asset quality stable(FB IN, Mkt Cap USD2.1b, CMP INR250, TP INR302, 21% Upside, Buy)Federal Bank (FB) recorded robust PPoP growth of 5%/23% QoQ/YoY (INR5.8b, 8% beat), led by 12%/24% QoQ/YoY NII growth, and controlled opex growth (+5%/+18% QoQ/YoY; 7% beat) on curbed employee expenses (+7% YoY).NII growth came in at 12%/24% QoQ/YoY (3% beat), aided by 25% YoY loan growth and an increase in the CD ratio to 83% (75%/80% in 2QFY18...
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