Federal Bank Ltd. (india) · NSE:FEDERALBNK
Federal Bank Ltd. (india) — The Federal Bank — Q2 2024 Earnings Presentation
39 slides from Federal Bank Ltd. (india)'s earnings presentation, Oct 17, 2023
Slide 1: Investor Information Q2 FY 2024
Investor Information Q2 FY 2024 Q1 FY 2024
Slide 2: Disclaimer
Disclaimer IMPORTANT: You must read the following before continuing. The following applies to this document, the oral presentation of the information in this document by The Federal Bank Limited (the “Bank”) or any person on behalf of the Bank, and any question-and-answer session that follows the or
Slide 3: Table of Content
TABLE OF CONTENT Pages 01 Key highlights 4-9 02 Business parameters 10-20 03 Distribution strategy and digital migration 21-27 04 Appendix 29-38
Slide 4: Consistently delivering robust growth and sustained profitability
Consistently delivering robust growth and sustained profitability… DEPOSITS ADVANCES PROFITABILITY Deposits: (₹ in cr) Net advances: (₹ in cr) Profitability: RoE* (%) RoA* (%) 2,22,496 2,32,868 15.73 15.72 1,92,817 14.36 1,89,146 YoY growth: 23% 1,83,487 QoQ growth: 5% 1,61,240 YoY growth: 20% QoQ g
Slide 5: Maintaining asset quality and expanding distribution capabilities
… while maintaining asset quality and expanding distribution capabilities ASSET QUALITY REACH KEY INITIATIVES NPAs (%): GNPA NNPA Branches / ATMs: (Sep-23) Introduction of WhatsApp Lending Platform for Pre-Approved Personal 67.41 70.02 71.03 2.46 2.38 1,389 / 1,937* Loans & registration for PM Socia
Slide 6: Key ratios
Key ratios RoA (%)* RoE (%)* Net interest margin (%)* 1.45 17.48 3.55 3.49 1.33 1.30 1.36 3.35 3.30 3.36 3.31 15.91 15.73 15.72 3.20 3.15 3.22 3.16 1.21 14.36 Q2 FY23 Q3 FY23 Q4 FY23 Q1 FY24 Q2 FY24 Q2 FY23 Q3 FY23 Q4 FY23 Q1 FY24 Q2 FY24 Q2 FY23 Q3 FY23 Q4 FY23 Q1 FY24 Q2 FY24 NIM on Net Earning As
Slide 7: Key P&L parameters
Key P&L parameters ₹ in cr Net interest income Other income 734 732 730 1,957 2,056 1,909 1,919 610 1,762 534 Q2 FY23 Q3 FY23 Q4 FY23 Q1 FY24 Q2 FY24 Q2 FY23 Q3 FY23 Q4 FY23 Q1 FY24 Q2 FY24 Fee income Net profit 660 540 543 542 535 954 903 854 804 704 Q2 FY23 Q3 FY23 Q4 FY23 Q1 FY24 Q2 FY24 Q2 FY23
Slide 8: Comparison: Y-o-Y
Comparison: Y-o-Y ₹ in cr Retail Wholesale Retail Agri BuB CVCE MFI COB CIB Advances 18% 24% 18% 67% 206% 24% 15% 52,528 -> 62,009 20,326 -> 25,115 13,539 -> 15,997 1,642 -> 2,734 761 -> 2,325 15,934 -> 19,729 59,228 -> 68,059 CASA CASA Ratio NRE Deposits Total Deposits -524 Deposits 5% bps 5% 23% 6
Slide 9: Comparison: Q-o-Q
Comparison: Q-o-Q ₹ in cr Retail Wholesale Retail Agri BuB CVCE MFI COB CIB Advances 6% 8% 6% 11% 27% 7% 1% 58,473 -> 62,009 23,287 -> 25,115 15,040 -> 15,997 2,457 -> 2,734 1,825 -> 2,325 18,369 -> 19,729 67,142 -> 68,059 CASA CASA Ratio NRE Deposits Total Deposits -68 Deposits 2% bps 0.9% 5% 70,85
Slide 10: Liability trends
Liability trends Deposits (₹ in cr) CA & SA (₹ in cr) and CASA ratio (%) CASA + Deposits <= 2Cr Other 2,32,868 YoY growth: 23% CA SA (Incl Bespoke) 2,13,386 31.17% 1,89,146 33.81% 36.94% 32.68% 36.41% 1,72,644 1,81,701 72,589 67,121 69,741 68,873 84% 81% 91% 58,370 92% 88% 55,452 55,803 56,876 54,51
Slide 11: Credit portfolio distribution
Credit portfolio distribution Gross Advances (₹ in cr) Gross Advances mix (Sep-23) Retail Book Wholesale Book Retail Book Wholesale Book 55% 1,95,968 1,77,377 1,63,958 1,47,639 87,788 1,34,877 81,585 75,162 62,000 66,744 YoY growth: 17% 45% 95,791 1,08,180 72,877 80,895 88,796 YoY growth: 22% Q4 FY2
Slide 12: Retail Banking
Retail Banking Retail advances mix (Sep-23) Retail advances mix (Excl Agri, BuB, CV/CE & MFI) (₹ in cr) 2% 3% 8,285 15 % 8,740 2,308 7,322 3,232 7,395 2,393 817 6,301 6,986 5,448 4,849 1,832 4,537 1,809 4,229 1,750 4,366 3,603 5,310 4,573 9,984 10,892 57 % 5,730 9,176 23 % 8,453 7,852 25,097 23,222
Slide 13: Wholesale Banking
Wholesale Banking Wholesale advances mix (Sep-23) Wholesale advances (₹ in cr) Success Snippets CoB CIB CoB CIB ● We initiated a lending relationship amounting to 87,788 approximately 50 Crores under a Multiple Banking 81,585 75,162 arrangement with a client based in North India, initially 66,745 62
Slide 14: High margin lending products
High margin lending products High Yielding Segment1 Credit Cards 3 2,308 182% Gross advances 23.7% YoY growth (INRcr) 21.3% Gross Advances share Sep-23 Personal Loans 3 3,232 Sep-22 +24 bps 76% Gross advances YoY growth (INRcr) Digital loan platform 78.7% 76.3% MSME (BuB + CoB) 35,616 44% 16% Gross
Slide 15: Select high margin lending products
Select high margin lending products CV / CE Gold loans Micro finance 2,457 2,734 22,608 2,325 Portfolio (₹ in cr) YoY YoY YoY 1,642 20,927 1,825 67% 17% 206% 19,299 QoQ QoQ 761 QoQ 11% 8% 27% Q2 FY23 Q1 FY24 Q2 FY24 Q2 FY23 Q1 FY24 Q2 FY24 Q2 FY23 Q1 FY24 Q2 FY24 Disbursements: PSL: No of Accounts:
Slide 16: Asset quality trends
Asset quality trends ₹ in cr Std Restructured Ac Net NPA Net SR Asset quality continues to remain robust across all segments 69 60 1,393 0 1,262 0 1,205 160 1,230 Provision Coverage Ratio 1,569 Increases to 71.03% 3,536 3,266 2,830 2,420 1,618 Recovery & Upgradation Q4 FY21 Q4 FY22 Q4 FY23 Q2 FY23 Q
Slide 17: Asset quality trends (cont'd)
Asset quality trends (cont’d) GNPA (%) NNPA (%) PCR (%)1 0.78 71.03 2.46 2.43 2.36 2.38 0.73 2.26 0.69 0.69 0.64 70.02 70.02 69.19 67.41 Q2 FY23 Q3 FY23 Q4 FY23 Q1 FY24 Q2 FY24 Q2 FY23 Q3 FY23 Q4 FY23 Q1 FY24 Q2 FY24 Q2 FY23 Q3 FY23 Q4 FY23 Q1 FY24 Q2 FY24 Slippage rate (%) Risk adjusted NIM (%)* Cr
Slide 18: Asset quality - rating distribution
Asset quality - rating distribution Rating distribution (CIB) Rating distribution (advances excluding CIB) External rating of CIB advances Internal rating of advances excluding CIB 11% Q2 FY24 2% 12% 8% 9% 2% Q2 FY24 5% Q1 FY24 5% 17% 31% 31% 18% 74% 79% Q1 FY24 17% 17% A & Above BBB <BBB OTHERS 29%
Slide 19: Fee income / other income
Fee income / other income Diversified and granular fee income ₹ in Cr Q2 FY23 Q3 FY23 Q4 FY23 Q1 FY24 Q2 FY24 QoQ YoY Loan processing fee 125 129 132 158 175 11% 40% Cards 116 128 137 153 175 15% 51% Para banking 37 41 45 27 52 93% 41% Banking commissions & exchanges 67 55 92 65 73 13% 9% General se
Slide 20: Capital position
Capital position ₹ in Cr Jun-23 Sep-23 Risk weighted assets Credit risk 142,131 148,031 Market risk 5,619 6,370 Operational risk 14,992 14,992 Total RWA 162,742 169,393 Tier-I capital funds 20,409 23,362 Tier-II capital funds 2,833 2,895 Total capital funds 23,242 26,257 CRAR 14.28% 15.50% Tier-I 12
Slide 21: Distribution: Deriving efficiency from footprint
Distribution: Deriving efficiency from footprint Continuous investment in expanding Pan India footprint 1 Sep-22 Sep-23 1 30 1 3 Branches 1,305 1,389 25 27 ATMs/ 1,876 27 1 1,937 11 13 Recyclers 8 2 2 58 9 33 1 LITE BRANCH 13 3 1 HEAVY DISTRIBUTION Sep-23 2 25 13% 17% Driven by alternate channels 10
Slide 22: Innovation through partnerships
Innovation through partnerships 1 Liability Instant Digital Partners Loans EMIs and Credit Merchant Cards Payments Gold Loan & Cross Border Priority 2 remittance Lending solutions Support Support Systems Systems 1Launched TAB based account opening for cooperate salary customers 2Launched NTB Digital
Slide 23: Growth through partnerships
Growth through partnerships Partners Share in FY’24 Key metrics Cards Issued: Spends 3.0x 2.5x 5.8x Co-branded 1.6x 2x 4.3x 1x 3.0x credit cards 1x 1.9x Card programs under CUG1 77% Sep-22 Dec-22 Mar-23 Jun-23 Sep-23 Sep-22 Dec-22 Mar-23 Jun-23 Sep-23 # Accounts: CASA Balance: 1.2x 1.2x 1x 1.1x 1.1x
Slide 24: Digitization as a Multiplier
Digitization as a Multiplier 347 Edu. Institutions 305 HUMAN AT THE CORE Feddy is Live on onboarded to Fee RPA Process collection Solution “Careerbook” 92% running 1.9 Lakh queries transactions answered by Feddy Serviced in Sep-23 Digitally (Retail 18K ₹ cr + Corporate) 508 Retail Mobile APIs made B
Slide 25: Major initiatives
Major initiatives WhatsApp Lending WhatsApp Banking – – Personal Loan & PMSBY/PMJJBY FedMobile 6.7.0 ⚫ Customers can join us on WhatsApp by sending a ‘Hi’ message to 9633 600 800 and unlock a world of Pre-Approved Personal Loans and avail Pradhan Mantri Suraksha Bima Yojana (PMSBY) and ⚫ UPI Interna
Slide 26: Digital migration
Digital migration Branch vs. Digital Transactions (₹ in Lakh)* Corporate Digital Products - Active Users1 160 146.91 93.00% 40 ,00 0 35,541 60 00 140 126.00 127.28 32,189 33,178 92.00% 35 ,00 0 5,111 92.42% 4,744 50 00 120 108.65 26,097 4,505 97.43 91.80% 91.00% 30 ,00 0 4,096 100 3,794 40 00 90.00%
Slide 27: Digital lending and card spends
Digital lending and card spends Digital Personal Card spends (₹ in Cr)1 Loans 1,20 ,000 5,00 0 1,07,872 4,50 0 1616 1,10 ,000 1,488 1,474 1,489 1469 1483 4,00 0 1,337 95,044 1,00 ,000 1252 90,0 00 87,922 91,790 3,50 0 1,091 1109 * 893 80,557 3,00 0 3,145 80,0 00 2,783 2,50 0 607 2,586 2,619 70,0 00
Slide 28: Appendix
Appendix FEDERAL BANK YOUR PERFECT BANKING PARTNER
Slide 29: Balance sheet & shareholding pattern
Balance sheet & shareholding pattern ₹ in Cr Jun-23 Sep-23 Share holding pattern (Sep-23) LIABILITIES Capital 424 470 Reserves & surplus 21,952 25,649 Deposits 2,22,496 2,32,868 26% Borrowings 21,178 19,181 37% Other liabilities & provisions 8,146 9,258 TOTAL 2,74,196 2,87,426 ASSETS 1% Cash & balan
Slide 30: Financials
Financials ₹ in Cr Q2 FY23 Q1 FY24 Q2 FY24 Q-o-Q Y-o-Y Interest income 4,021 5,025 5,455 9% 36% Interest expenses 2,259 3,106 3,399 9% 50% Net interest income 1,762 1,919 2,056 7% 17% Other income 610 732 730 -0.3% 20% Operating expense 1,159 1,349 1,462 8% 26% Total income 4,630 5,757 6,186 7% 34%
Slide 31: Key Indicators
Key Indicators Q2 FY23 Q3 FY23 Q4 FY23 Q1 FY24 Q2 FY24 Book Value 93.00 96.74 101.22 105.04 110.70 (Per Share in ₹) Shareholder value EPS 13.26 15.09 17.30 16.22 16.57 (annualized) CASA + Deposits <= ₹2cr Granularity (% of Total Deposits) 92% 88% 84% 82% 81% ROA % 1.21 1.33 1.45 1.30 1.36 Profitabil
Slide 32: Fresh slippages break up
Fresh slippages break up ₹ in cr Fresh slippages NPA Composition Security receipts Retail Agri BuB CV/CE CoB CIB Q1 FY24 Q2 FY24 Book Value 496 Business NPA NPA 36 Gross NPA 406 411 436 4 Retail 1,366 1,425 0 398 Agri 977 942 58 101 375 BuB 988 996 5 365 81 CV/CE 34 39 70 42 91 7 CoB 679 664 7 9 100
Slide 33: Top Sectors in Wholesale Advance Portfolio
Top Sectors in Wholesale Advance Portfolio Top Sector wise CB,CIB Balance O/s as a % of Gross Advances (Sep-23)* MFIs, HFCs and NBFCs other than DFIs 11.79% Trade 3.49% Services 22.19% Other Other Services (plServices specify) 3.19% Real Estate Activities (Other than 1.98% Residential Mortgages) Tra
Slide 34: Group companies
Group companies Fedbank Financial Services Subsidiary Federal Operations & Services (FedServ) Subsidiary 72.8% 100% ▪ A wholly owned subsidiary company of Federal Bank ▪ Marketing Retail Asset Products of the Bank ▪ Provides operational & technology oriented services to ▪ Retail Hubs established at
Slide 35: Corporate governance & ESG snapshot
Corporate governance & ESG snapshot Strong & Diverse 11 73% Total Board Independent Strong Board & Diverse Board Members Directors Women Women Focus on Gender 42% 18% Representation Representation diversity in workforce in the Board Employee Recognition Employee Recognition Governance Structure ESG
Slide 36: Public Commitments
ESG performance snapshot Finance women Public Commitments Grow green portfolio In-house solar power Water conservation Bank branches to be Gender diversity ratio entrepreneurs – size generation capacity capacity green certified (Women) BC Channel Greater than or Target metric ₹ 13,000 Cr 500KW 1 Lak
Slide 37: Award-winning franchise & other initiatives / highlights
Award-winning franchise & other initiatives / highlights Launched WhatsApp Lending Platform for Pre-Approved India’s Top 10 Best Workplaces for Women- 2023 Personal Loans and Registration for PMJBY & PMSBY Great Place to Work Institute, India Successfully Raised 3040 Crs via QIP boosting Tier 1 Capi
Slide 38: External ratings
External ratings Fixed Deposit A1+ (Short term) Fixed Deposit AA+ Certificate of Deposit A1+ India Ratings Tier 2 (Capital) Bonds & Research Pvt Ltd, IND AA CARE AA+ CARE Fixed Deposits (short term) and Certificate of Deposits enjoy highest rating in that class 38
Slide 39: Thank You
Thank You 39