Stock Report

The Federal Bank Limited's credit ratings reaffirmed



Posted On : 2021-12-01 20:23:55( TIMEZONE : IST )

CRISIL Ratings has reaffirmed its 'CRISIL A1+' rating on the short-term debt programmes of The Federal Bank Limited (Federal Bank).

The rating continues to reflect the bank's comfortable capitalisation, healthy resource profile, and strong brand among nonresident Indians (NRIs). These strengths are partially offset by average asset quality and profitability, and relatively small scale of operations with geographic concentration in business.

In-line with the Covid-19 relief measures announced by the Reserve Bank of India (RBI), Federal Bank had provided moratorium to its borrowers. Though collections declined during the initial months of the first wave, they improved subsequently. However, intermittent lockdowns and localised restrictions amid the second wave of the pandemic impacted collections once again. Although the impact was moderate during this phase, any adverse change in the payment discipline of borrowers may lead to higher delinquencies.

Under the schemes announced by the RBI dated January 1, 2019; February 11 and August 6, 2020; and May 5, 2021, the bank had restructured 2.9% of gross advances as on September 30, 2021, of which 2.5% was covid related. Retail (including CV/CE financing) accounted for 62% of the covid-related restructuring, small and medium enterprise (SME) 29%, agriculture 5% and corporate 4%. While majority of the restructured book is well collateralised, its performance as well as overall asset quality will remain monitorables.

Shares of The Federal Bank Limited was last trading in BSE at Rs. 88.60 as compared to the previous close of Rs. 86.95. The total number of shares traded during the day was 933604 in over 4747 trades.

The stock hit an intraday high of Rs. 88.75 and intraday low of 87.15. The net turnover during the day was Rs. 82409651.00.

Source : Equity Bulls

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