Result-Analysis-Image

Federal Bank 1QFY21 Highlight 1QFY21 4QFY20 1QFY20 YoY (%) QoQ (%)
Interest Income 3444 3397 3229 7% 1%
Interest Expenses 2148 2181 2075 4% -2%
Net Interest Income 1296 1216 1154 12% 7%
Other Income 488 711 392 24% -31%
Operating Expenses 852 968 763 12% -12%
Total Income 3933 4108 3621 9% -4%
Total Expenses 3000 3149 2838 6% -5%
Operating Profit 932 959 783 19% -3%
Total Provision 532 658 399 33% -19%
Net Profit 401 301 384 4% 33%
Net interest Margin (%) 3.07% 3.04% 3.15% (8)bps 3 bps
Cost to income ratio (%) 47.76% 50.22 49.36% (160) bps (246) bps

 

Federal Bank Balance sheet 1QFY21 1QFY20
Capital 399 397
Reserve and Surplus 14524 13264
Deposits 154938 132537
Borrowings 11237 9951
Other Liability and Provision 4723 4188
Total 185821 160338
Cash and Balance with RBI 5887 6449
Balance with bank, Money at call 14054 2791
Investments 34749 31810
Advances 121297 112032
Fixed Assets 460 469
Other Assets 9374 6787
Total 185821 160338

 

Result Highlight:

 

  • Net Interest Income up 12% to Rs 1,296.4 crore and Net profit up 4% to Rs 400.77 crore.
  • Gross NPA at 2.96% from 2.84% in the previous quarter and Net NPA at 1.22% from 1.31% .
  • Provisions at Rs 394.6 crore from Rs 567.5 crore in the previous quarter and Rs 192 crore last year.
  • Made additional net provisions of Rs 93 crore against the likely impact of Covid-19.
  • Fresh slippages during the quarter is Rs180cr vs 280cr in Q4FY20
  • Loan growth at ~8.3% YoY to Rs 1.21 t. Deposits grew at 17% YoY. Retail deposits forms 92% of total deposits.
  • CASA grew at 19% YoY and improved to 32.02% vs 30.5% in 4QFY20.
  • Moratorium Update: Overall, 35% of the loan portfolio has availed moratorium as on 12th Jul’20 while Net moratorium stands at 24%.

Concall Highlight:

  • Bank maintain their strategy of keeping deposit base granularized and diversified with record numbers across CASA.
  • Robust traction in saving account deposit especially NR saving account deposits help the Bank’s liability franchise to strengthen. Bank focuses on growing retail deposits while curtailing bulk deposit.
  • Loan book growth remained curtailed at 8.3% affected by COVID-19 and weak macros.
  • Disbursed Rs 10bn (as on 14.07.20 Rs 12.5 billion) though only 70%-75% of eligible customers opted for it with some customers utilizing the funds to pay their moratorium dues.
  • Under the Retail moratorium book, significant number of customers have substantial balances available.
  • NIMs were supported by growth in favorable products like Gold and restrained growth from low yielding products like Corporate and Housing while robust growth in low cost deposits also aided NIM levels.
  • Pension provisioning will remain vulnerable to yield movements sometimes warranting further provisioning while also warranting for write backs.
  • For FY21, Bank expects recoveries to remain dull with only Rs 100 crore expected for Q2FY21 as against the usual run-rate of Rs 250 crore-Rs 300 crore per quarter

View:

Bank has reported good set of numbers with strong liability franchise and substantial improvement in slippage and operating cost. Management highlighted that Q2FY21 will provide the real stress as moratorium is likely to be lifted in August 2020. Company is actively reviewing its overall cost structure which is reflecting in Q1FY21 financial results (lowest cost-income ratio in last 24 quarters). No specific guidance is given by the management regarding the same.

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