Open ICICI
3-in-1 Account
Manage your Savings, Demat and Trading Account conveniently at one place
- 16 Jan 2023
- ICICIdirect
-
Share
-
-
-
-
-
FEDERAL BANK REPORTS STRONG SET OF NUMBERS; OVERALL BEAT ON OUR ESTIMATES
FEDERALBNK - 207 Change: -0.19 (-0.09 %)Federal Bank – Q3FY23 First Cut
(CMP – Rs 139, MCap - Rs 29,465 crore)
Q3FY23 Earnings Summary
Federal Bank beat our estimates in most of the parameters. Business growth continued its healthy traction resulting in strong operational performance. Asset quality continue to remain healthy with GNPA and NNPA ratio at 2.43% and 0.73%
Net interest income (NII) was up 27.1% YoY and 11.1% QoQ to Rs 1957 crore (ahead of our estimates of Rs 1822 crore), aided by healthy loan growth of 19.1% YoY and improvement in NIMs by 19 bps QoQ at 3.49%. Other income declined 12.4% QoQ mainly due to lower treasury income
Opex was up 9.7% YoY and ~4.9% QoQ, whereas C/I ratio stood steady at 48.8% (vs 54.8% in Q3FY22). Provisions declined both QoQ and YoY at Rs199 crore, resulting in credit cost at 38 bps vs 53 bps in Q2FY23. Thus, PAT for the quarter beat our estimates at Rs 804 crore, up 54% YoY and 14.2% QoQ (vs our estimate of Rs769 crore). Strong PAT resulted in highest RoA at 1.33% (annualised)
Slippages remained below 1% during the quarter. Total stressed book (NNPA + R/s + Net SR) continued to decline to 1.78% vs 1.98% in Q2FY23. Retail GNPA improved by 5 bps QoQ while corporate GNPA deteriorated by 7 bps QoQ
Total funded assets were up 19.1% YoY and 4.3% QoQ to Rs 1.71 lakh crore, led by strong growth across segments. Within retail, auto segment grew 27% YoY. Retail and agri segment was up 18%, 20% YoY, respectively. Customer deposit growth was at 14.8% YoY to Rs 2.01 lakh crore, in which CASA deposits grew 7% YoY. CASA ratio moderated to 34.24% vs. 36.41% in Q2FY23 and 36.68% in Q3FY22
View: The bank reported yet another strong quarter with all round performance. Healthy business growth and transmission of interest rates aided margins traction. Growth outlook and any further improvement in RoA trajectory would be a positive trigger.
Impact: Positive