Federal Bank Q4 Results Review - RoA Continue To Improve; NIMs Declined QoQ: IDBI Capital

IDBI Capital Report

Federal Bank Ltd.’s credit growth remain strong; stood at 20% YoY (20% YoY Q3 FY23) backed by strong growth across the segments. Management guided for high teens credit growth for FY24.

Asset quality remains stable with gross non-performing asset at 2.36% versus 2.43% QoQ. Stressed book % of assets declined to 1.6% versus 1.78% QoQ.

Deposits growth steadily improved to 17% YoY versus 15% YoY (Q3 FY23). Net interest income declined by 2% QoQ led by decline in net interest margins.

Operating profit grew by 5% QoQ led by higher non-interest income (up 37% QoQ). Provisions declined by 41% QoQ led to strong profitability growth (up 12% QoQ); resulted return on asset to 1.41% (1.32% Q3 FY23). Federal Bank's management guided exit RoA target to reach 1.3 - 1.35% FY24.

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