Federal Bank eyes I-banking, equity broking foray

Kerala-based Federal Bank plans to make an entry into the investment banking space and foray into equity broking services, a senior bank official said today.

"Yes, we are planning to enter the equity broking business. We are also keen on beginning investment banking services, but we are yet to formally move the regulators and exchanges in this regard," a top official of the Kochi-based lender said.

However, he did not offer a timeline for the proposed foray, saying it is too early.

With a balance sheet of Rs 81,000 crore (as of September 30), Federal Bank is the fourth-largest private lender in the country and the largest in Kerala.

 

The bank had reported a net profit of Rs 146 crore in the first quarter this fiscal, while its net interest margin stood 3.85%.

Meanwhile, as part of its 66th Foundation Day celebrations, the bank has decided to open 66 branches across the country, including three in Mumbai, next Tuesday, the bank said in a statement.

With three more branches in Mumbai, the bank's total branch network will touch 100 in the state, out of which 33 will be in the city alone, it said.

Apart from the branch opening, it has also decided to launch a special deposit scheme, wherein it will offer 50 bps more on a 66-day term deposit, at 7.5%, during the one-month period beginning October 18.

The bank, which is one of the largest gold loan players in the state, is also offering a 2% discount on gold purchases during Diwali, besides a special gold loan scheme under which it will charge only 1.10% interest per month per Rs 100 of loan against the precious metal.

The bank's gold loan book stood at Rs 2,500 crore as of Q2, while its overall loan book stood at Rs 34,000 crore and its deposit base at Rs 47,000 crore.

In Q1, the bank had a CAR of 15.05% and net NPAs of 0.76% and gross NPAs of 3.5%. The bank's provision coverage ratio stood at 81% in Q1, higher than the mandatory 70%.