Federal Bank (Q4 FY14)

India Infoline News Service | Mumbai |

Federal Bank continued to execute well on its strategy of de-bulking corporate book and pushing hard on relatively safer retail and SME loans.

CMP Rs90, Target Rs112, Upside 24.4% 
  • Impressive execution on loan mix strategy; loan growth to pick-up in FY15 

  • Deposits mix continues to strengthen; retail TD and CASA share on the rise

  • Significant NIM expansion was a positive surprise; calibrated branch addition to keep cost/income ratio under check   

  • Addition of impaired assets was higher than expected, but seems to have peaked as pipeline is marginal

  • Retain Buy as valuation is cheap and RoA is on the mend; preferred high-beta valuation recovery play

Result table
(Rs mn)
Q4 FY14
Q3 FY14
% qoq
Q4 FY13
% yoy
Total Interest Income
 18,387
 17,397
 5.7
 15,835
 16.1
Interest expended
 (12,136)
 (11,941)
 1.6
 (11,037)
 10.0
Net Interest Income
 6,251
 5,456
 14.6
 4,798
 30.3
Other income
 1,784
 1,562
 14.2
 1,976
 (9.7)
Total Income
 8,035
 7,018
 14.5
 6,774
 18.6
Operating expenses
 (3,835)
 (3,459)
 10.8
 (3,071)
 24.8
Provisions
 (550)
 (73)
 654.9
 (982)
 (43.9)
PBT
 3,650
 3,486
 4.7
 2,721
 34.2
Tax
 (877)
 (1,185)
 (26.0)
 (494)
 77.8
Reported PAT
 2,773
 2,301
 20.5
 2,227
 24.5
EPS
 16.2
 13.4
 20.5
 13.0
 24.5

Key  Ratios
Q4 FY14
Q3 FY14
chg qoq
Q4 FY13
chg yoy
NIM (%)
 3.6
 3.2
 0.3
 3.1
 0.5
Yield on Advances* (%)
 11.6
 12.1
 (0.4)
 11.2
 0.5
Cost of Funds* (%)
 7.5
 7.6
 (0.1)
 7.5
 0.0
CASA (%)
 30.8
 30.4
 0.5
BSE 105.10 [1.65] ([1.55]%)
NSE 105.00 [1.85] ([1.73]%)

***Note: This is a NSE Chart

 

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