Home / Companies / News / Federal Bank: Ripe for re-rating despite guidance in run-rate of slippages

Federal Bank: Ripe for re-rating despite guidance in run-rate of slippages

Strong growth is expected to counter the likely asset quality issues

Premium

Analysts at Morgan Stanley have recently turned from ‘underweight’ to ‘equal-weight’ on the Federal Bank stock for its growth potential.

Hamsini Karthik Mumbai

3 min read Last Updated : Dec 18 2020 | 10:22 PM IST

Banking stocks have been on the rise since October. While Federal Bank — with 28 per cent gains in the last three months — has participated in the re-rating journey, gains seem muted when compared to IndusInd Bank or RBL Bank.

The Street may be worried that over 38 per cent of the bank’s loan exposure is to corporates and 19 per cent to small and medium enterprises (SMEs), which is comprehensible.

Further, the fact that asset quality in the past two quarters may have been camouflaged by the moratorium, the bank’s provision of only Rs 590 crore towards likely Covid-induced asset

Topics : Federal Bank bank stocks SMEs Bank loans Morgan Stanley Private banks IndusInd Bank RBL Bank NPA slippage

What you get on BS Premium?

Unlock 30+ premium stories daily hand-picked by our editors, across devices on browser and app.
Pick your 5 favourite companies, get a daily email with all news updates on them.
Full access to our intuitive epaper - clip, save, share articles from any device; newspaper archives from 2006.
Preferential invites to Business Standard events.
Curated newsletters on markets, personal finance, policy & politics, start-ups, technology, and more.

VIEW ALL FAQs

Need More Information - write to us at assist@bsmail.in