The Federal Bank: Q3FY23 Result Update
17-01-2023

Federal Bank Ltd
Market Cap
29,818Cr
CMP 141
P/B  1.3xFY23

Results

(INR Cr)

YoY Growth

Comments

Advances

1,68,173

19%

Loan Growth of 18-20% across segments

Net Interest Income

1957

27%

NIM increased by 0.22% to 3.49% year on year

Net Profit

804

54%

Fee Income improved by 32% to 543 Cr, while provisions reduced by 7% to 198 Cr

 

Check Federal Bank 10 year X-ray here

Key Highlights –

·        Retail advances (54% of loan book) grew by 18%; Wholesale Advances (46% of book) grew by 19%.

·        Deposits increased by 15% to 201,408 Cr, CASA Ratio at 34.24%.

·        50.4% of the book is floating- linked to ELBR (External Benchmarks Lending Rate).

·        GNPA at 2.43% decreasing by 0.63%, while NNPA at 0.73% decreasing by 0.32% on yearly basis. Cost of Credit rose to 0.38% vs. 0.22% in Q3FY22.

Management Outlook –

·        Management guided on NIM pressure as rates increase following quarter, with 3.35-3.4% guidance for FY23

·        Management guided on high-teens growth in advances in FY24 across segments.

·        Management expects to open 15 additional branches this year, with 80-90 new ones in FY24 & 25.

·        Cost of funds may move up by 0.2%, while advances by 0.25-0.3% per quarter in future, based on rate hikes by RBI.

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