Shares of Federal Bank rallied 9 per cent in intra-day trades on Friday and registered a fresh 52-week high at Rs 105.10, in an otherwise volatile market after the lender reported a strong 49.5 per cent year on year (YoY) jump in net profit at Rs 460 crore in September quarter (Q2FY22). The strong earnings were on the back of a healthy operational performance. In comparison, the S&P BSE Sensex was down 0.40 per cent at 60,678 points at 02:24 pm.
In the past one month, Federal Bank has outperformed with a gain of 30 per cent, as compared to 3 per cent rise in the S&P BSE Sensex. The trading volume at the counter more than doubled with a combined 94 million equity shares changing hands on the NSE and BSE.
In the past 13 months, the stock has more than doubled or up 115 per cent from level of Rs 48.90 on the BSE. It had hit a record high of Rs 128 on October 17, 2017.
Ace investor Rakesh Radheshyam Jhunjhunwala (2.64 per cent) and his wife Rekh Rakesh Jhunjhunwala (1.01 per cent) collectively hold 3.65 per cent stake in Federal Bank at the end of September 2021 quarter, shareholding pattern data shows.
In Q2FY22, Federal Bank’s net interest income (NII) grew 7.2 per cent YoY, 4 per cent sequentially at Rs 1,479 crore, on the back of credit growth in select segments. Net interest margin (NIM) improved 7 bps YoY and 5 bps sequentially at 3.2 per cent.
Fresh slippages contained to Rs 320 crore that, along with recoveries and upgrades of Rs 421 crore led to reduction of gross non-performing (GNPA) and net NPA to 3.24 per cent and 1.12 per cent respectively. The strong recovery helped bring down credit cost.
Federal Bank said it launched Credit Cards with Rupay & Visa networks in fastest possible time. The bank also partnered with OneCard for launch of Credit Card. It empanelled by government of India and Reserve Bank of India for collection of direct and indirect taxes.
The bank, amidst the volatile environment, has delivered a very encouraging performance braving a lot of odds. We witnessed strong traction in NIM and pick up in NII on the back of good credit growth in certain segments. Strong recovery and upgrades helped in virtually no credit cost for the quarter,” Shyam Srinivasan, Managing Director & CEO, Federal Bank said.
CASA growth of 18 per cent YoY led CASA ratio to reach an all-time high of 36 per cent. This further strengthens the granularity of our deposit portfolio. Inward Remittances continues to be a strong forte for the Bank with a market share of 20.54%. The digital story of the Bank continues to prosper with Fintech partnerships progressing well and contributing to 50 per cent + of new accounts booked, said Shyam Srinivasan.