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Research
Federal Bank - Q2FY22 First Cut - ICICI Direct
Posted On : 2021-10-24 15:11:56( TIMEZONE : IST )
(CMP - Rs. 98, MCap - Rs. 20648 crore)
Earnings largely in-line with expectations, business growth picks-up
Q2FY22 Earnings Summary
- Federal Bank has posted decent set of numbers prima-facie as the net interest income was up 7.2% YoY and 4.3% QoQ to Rs. 1479 crore on the back of margin improvement and credit pick-up. NIMs increased by 5 bps QoQ to 3.2% owing to better show on asset quality. Other income was down 1.1% YoY to Rs. 444 crore (after some revision in prior numbers). Fee income however showed better growth of 46% QoQ to Rs. 373 crore.
- C/I ratio jumped meaningfully as Opex increased 20% YoY and 13.5% QoQ to Rs. 1059 crore, this was primarily on account of Rs. 177 crore additional pension related employee expenses. Provisions during the quarter declined 54.9% sequentially to Rs. 245 crore as a result of lesser stress formation. Thus net profit for Q2FY22 stood at Rs. 460 crore, up 49.6% YoY.
- Overall asset quality show was satisfactory as GNPA and NNPA declined 26 bps and 11 bps sequentially to 3.24% and 1.12% respectively. Fresh slippages halved from Rs. 640 crore to Rs. 320 crore sequentially while recoveries & upgrades stood at Rs. 423 crore. Covid related restructuring was up from 1.8% to 2.5% of loans. Management commentary on overall stress scenario is awaited.
- Business activity gained momentum as loan growth for the quarter stood at 9.4% YoY and 3.6% QoQ to Rs. 134405 crore while deposits were up 9.7% YoY and 1.5% QoQ to Rs. 171995 crore, in which CASA increased 18% YoY to Rs. 62191 crore. Advances growth was mainly driven by Retail and Agri segments which were up 12% YoY and 20% YoY respectively.
Shares of The Federal Bank Limited was last trading in BSE at Rs. 104.05 as compared to the previous close of Rs. 96.55. The total number of shares traded during the day was 5716165 in over 22854 trades.
The stock hit an intraday high of Rs. 105.60 and intraday low of 93.65. The net turnover during the day was Rs. 571531330.00.
