FEDERAL BANK LTD

The Federal Bank Limited (‘the Bank’) was incorporated in 1931 as Travancore Federal Bank Limited. It provides retail and corporate banking, para banking activities such as debit card, third party product distribution etc., treasury and foreign exchange business. It is the second-largest bank and the largest private sector bank in Kerala.

Key Business

• Retail and Corporate Banking
• Para Banking Activities
• Third Party Product Distribution
• Treasury And Foreign Exchange

Shareholding Pattern

PUBLIC

PROMOTER

Financial Summary

Synopsis of Financials

• Strong year of performance with aspirational return ratios achieved consistently.
• All-time high annual profit.
• Total business crossed INR 4.6 lakh crores.
• Balance sheet crossed INR 3 lakh crores.
• Q4 FY ’24 was operationally one of the strongest ever.
• Margins expanded marginally.
• Asset quality remains pristine.
• Net profit reported for Q4 was INR 906 crores, impacted by a one-off pension effect of about INR 160 crores.

Final Outlook

Federal Bank showed strong growth in loans (advances) and deposits, at 20% and 18% year-over-year respectively. This helped them maintain profitability (margins) despite rising costs. The bank invested in expanding its branch network and staff, which increased expenses (CI ratio) but may benefit them in the long term. While profitability ratios (RoA) were lower due to higher expenses, the bank maintained a good record on loan quality (low slippages and credit cost). This indicates they are managing their loans well.

Stock is trading in an upsloping channel from past more than 10 months and recently has rebounded higher after taking support near the lower band of the channel.

Federal Bank has been showcasing solid performance, with advance growth of 21%YoY and deposit growth of 18.3%YoY. The performance is expected to continue with advances growth at 20.4% and deposits at 21% during FY25-26E.

BUY/Hold For Long Term Will be good.