Federal Bank Ltd. (india) · NSE:FEDERALBNK
Federal Bank Ltd. (india) — The Federal Bank — Q4 FY2024 Earnings Presentation
44 slides from Federal Bank Ltd. (india)'s earnings presentation, May 2, 2024
Slide 1: Intimation of Investor Presentation to Stock Exchanges
Secretarial Department SEC/LODR/45/2024-25 02.05.2024 The Manager The Manager The National Stock Exchange of India Limited Department of Corporate Services Exchange Plaza, Bandra-Kurla Complex, BSE Limited, Bandra (E), Mumbai - 400 051 Phiroze Jeejeebhoy Towers, Floor 25, Dalal Street, Mumbai- 400 0
Slide 2: Investor Information Q4 FY 2024
Investor Information Q4 FY 2024 Q1 FY 2024
Slide 3: Disclaimer
Disclaimer IMPORTANT: This presentation has been prepared by The Federal Bank Limited (the “Bank”) solely for information purposes, without regard to any specific objectives, financial situations or informational needs of any particular person. All information contained has been prepared solely by t
Slide 4: Table of Content
TABLE OF CONTENT Pages 01 Key highlights 4-9 02 Business parameters 10-21 03 Distribution strategy and digital migration 22-29 04 Appendix 30-42
Slide 5: 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*# (%) 2,52,534 17.48 2,39,591 1,99,185 2,09,403 2,13,386 YoY growth: 18% 14.80 1,74,447 QoQ growth: 5% 12.75 YoY growth: 20% QoQ
Slide 6: Maintaining asset quality and expanding distribution capabilities
… while maintaining asset quality and expanding distribution capabilities ASSET QUALITY REACH KEY CALLOUTS NPAs (%): GNPA NNPA Banking Outlets / ATMs: (Mar-24) Massive drop in RIDF allocation. RIDF allocation has reduced from Rs. 6144 1,504 / 2,015* 70.02 71.08 71.08 2.36 2.29 Cr in FY 22 to Rs. 517
Slide 7: Key ratios
Key ratios NIMs improve with ROA and ROE for FY24 at 1.32 and 14.73, respectively. RoA (%)*# RoE (%)*# Net interest margin (%)* FY24 - 1.32 FY24 - 14.73 FY24 - 3.20 1.45 1.39 17.48 1.30 1.36 3.36 15.73 15.72 3.20 3.22 3.19 3.21 1.22 14.80 12.75 Q4 FY23 Q1 FY24 Q2 FY24 Q3 FY24 Q4 FY24 Q4 FY23 Q1 FY24
Slide 8: Key P&L parameters
Key P&L parameters Highest ever Net Interest Income with a 14% YoY increase in Fee Income ₹ in cr Net interest income Other income Highest ever 2,123 2,195 863 2,056 1,909 1,919 734 732 730 754 Q4 FY23 Q1 FY24 Q2 FY24 Q3 FY24 Q4 FY24 Q4 FY23 Q1 FY24 Q2 FY24 Q3 FY24 Q4 FY24 Fee income Net profit# 660
Slide 9: Comparison: Y-o-Y
Comparison: Y-o-Y ₹ in cr Retail Wholesale Retail# Agri# BuB# CVCE# MFI# COB# CIB# Advances 20% 28% 21% 57% 141% 27% 12% 56,166 -> 67,435 21,919 -> 28,097 14,095 -> 17,073 2,186 -> 3,442 1,432 -> 3,447 16,968 -> 21,487 65,731 -> 73,596 CASA CASA Ratio NRE Deposits Total Deposits -330 Deposits 6% bps
Slide 10: Comparison: Q-o-Q
Comparison: Q-o-Q ₹ in cr Retail Wholesale Retail# Agri# BuB# CVCE# MFI# COB# CIB# Advances 4% 5% 2% 13% 25% 3% 2% 65,041 -> 67,435 26,647 -> 28,097 16,680 -> 17,073 3,057 -> 3,442 2,754 -> 3,447 20,774 -> 21,487 71,978 -> 73,596 CASA CASA Ratio NRE Deposits Total Deposits -125 Deposits 1% bps 5% 5%
Slide 11: Liability trends
Liability trends Total Deposits crosses the milestone figure of Rs.2.5 lakh crore with a 18% YoY growth. Deposits (₹ in cr) CA & SA (₹ in cr) and CASA ratio (%) CASA + Deposits <= 2Cr Other 2,52,534 2,39,591 YoY growth: 18% CA SA (Incl Bespoke) 2,13,386 30.63 29.38 33.81 36.94 32.68 1,72,644 1,81,70
Slide 12: Credit portfolio distribution
Credit portfolio distribution Retail book share grows by 100 bps with 25% YoY growth. Gross Advances (₹ in cr) Gross Advances mix (Mar-24) Retail Book# Wholesale Book# Retail Book# Wholesale Book# 56% 2,02,475 2,12,623 44% 1,77,377 1,47,639 92,752 95,083 YoY growth: 15% 1,34,877 82,699 66,744 61,779
Slide 13: Credit portfolio distribution
Credit portfolio distribution Retail & SME as % of loan book (₹ in cr) Loan book by interest rate type(%) 10% 2,50,000 51.00% 11% 50.50% 2,00,000 52% 50.00% 1,50,000 27% 49.50% 1,00,000 EBM Fixed MCLR Others 49.00% 50,000 48.50% Yield on advances (%) 9.13 9.37 9.48 0 48.00% Q4 FY23 Q1 FY24 Q2 FY24 Q
Slide 14: Retail Banking
Retail Banking Stable consistent growth in established verticals with exponential growth in new businesses Retail advances mix (Mar-24) Retail advances mix (Excl Agri, BuB, CV/CE & MFI) (₹ in cr) 3% 8.869 3% 8,723 2,778 3,060 14 % 7,456 1,486 3,845 3,647 7,302 6,775 7,209 270 2,393 7,151 5,448 4,540
Slide 15: Wholesale Banking
Wholesale Banking Significant step towards being a Banker than a Lender Wholesale advances mix (Mar-24) Wholesale advances (₹ in cr) Success Snippets ● Auto ancillary company, based out of North India had CoB# CIB# CoB# CIB# 92,752 95,083 a BBB- rating for its small scale of operations. The 82,699 c
Slide 16: High margin lending products
High margin lending products High Yielding Segment1 Credit Cards 3 3,060 106% Gross advances 24.6% YoY growth (INRcr) 21.8% Gross Advances share Mar-24 Personal Loans 3 3,845 Mar-23 +280 bps 61% Gross advances YoY growth (INRcr) Digital loan platform 78.2% 75.4% MSME (BuB + CoB) 38,560 1100 Cr 24% G
Slide 17: Select high margin lending products
Select high margin lending products CV / CE Gold loans Micro finance 3,442 25,226 3,447 3,057 23,917 Portfolio (₹ in cr) YoY 19,841 YoY 2,754 YoY 2,186 57% 27% 141% 1,432 QoQ QoQ QoQ 13% 5% 25% Q4 FY23 Q3 FY24 Q4 FY24 Q4 FY23 Q3 FY24 Q4 FY24 Q4 FY23 Q3 FY24 Q4 FY24 Disbursements: PSL: No of Accounts
Slide 18: Asset quality trends
Asset quality trends Stability visible across all segments ₹ in cr Std Restructured Ac Net NPA Net SR Asset quality continues to remain robust across all segments 69 1,393 0 1,205 0 160 0 1,284 Provision Coverage Ratio 1,569 1,255 steady at 71.08% 3,536 2,830 2,200 2,027 1,618 Recovery & Upgradation
Slide 19: Asset quality trends (cont'd)
Asset quality trends (cont’d) GNPA (%) NNPA (%) PCR (%) 2.36 2.38 2.29 83.49 2.26 82.65 83.14 82.79 82.68 2.13 0.69 0.69 0.64 0.64 0.60 70.02 70.02 71.03 71.08 71.08 PCR PCR (Incl TWO) Q4 FY23 Q1 FY24 Q2 FY24 Q3 FY24 Q4 FY24 Q4 FY23 Q1 FY24 Q2 FY24 Q3 FY24 Q4 FY24 Q4 FY23 Q1 FY24 Q2 FY24 Q3 FY24 Q4
Slide 20: 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 13% Q4 FY24 2% 9% 7% 8% 2% Q4 FY24 5% Q3 FY24 5% 17% 32% 17% 32% 81% 78% Q3 FY24 17% 17% A & Above BBB <BBB OTHERS 29%
Slide 21: Fee income / other income
Fee income / other income Diversified and granular fee income ₹ in Cr Q4 FY23 Q1 FY24 Q2 FY24 Q3 FY24 Q4 FY24 QoQ YoY Loan processing fee 132 158 175 149 186 25% 41% Cards 137 153 175 181 207 14% 51% Para banking 45 27 52 63 56 -12% 23% Banking commissions & exchanges 92 65 73 72 70 -2% -23% General
Slide 22: Capital position
Capital position Robust capital position marked by a self-sustaining capital structure and ample buffers. ₹ in Cr Dec-23 Mar-24 Risk weighted assets Credit risk 158,981 167,469 Market risk 7,100 7,228 Operational risk 14,992 14,992 Total RWA 181,073 189,690 Tier-I capital funds 24,402 27,707 Tier-II
Slide 23: Distribution: Deriving efficiency from footprint
Distribution: Deriving efficiency from footprint Continuous investment in expanding Pan India footprint 1 Mar-23 Mar-24 1 34 Banking 1,504 3 2 1,372 Outlets# 26 27 2 ATMs/ 2,015 31 1,916 15 16 Recyclers* 10 2 2 60 35 2 LITE BRANCH 10 Mar-24 18 4 2 HEAVY DISTRIBUTION 2 26 14% 17% Driven by alternate
Slide 24: Innovation through partnerships
Innovation through partnerships Liability Instant Digital Partners Loans EMIs and Credit Merchant Cards Payments Gold Loan and Cross Border Priority remittance Lending solutions Support Systems ✓ Three new partnerships for credit cards ✓ Three new partnerships for digital personal loans ✓ 5 Minute D
Slide 25: Growth through partnerships
Growth through partnerships Partners Share in FY’24 Key metrics Cards Issued: ENR: 1.7 1.8 1.5 1.3 Co-branded 1.0 1.5 1.9 2.0 1.3 credit cards 1.0 Card programs under CUG1 79% Mar-23 Jun-23 Sep-23 Dec-23 Mar-24 Mar-23 Jun-23 Sep-23 Dec-23 Mar-24 # Accounts: CASA Balance: 16% 1.1 1.7 1.1 1.1 1.1 1.5
Slide 26: Digitization as a Multiplier
Digitization as a Multiplier 411 Edu. Institutions 326 HUMAN AT THE CORE Feddy is Live on onboarded to Fee RPA Process collection Solution “Careerbook” 94% running Approx 4.7 Lakh transactions queries answered Serviced by Feddy in this Digitally (Retail 24K ₹ cr + Corporate) 550 quarter Retail Mobil
Slide 27: Digitization as a Multiplier: Major Initiatives
Digitization as a Multiplier Improving Digital Footprint across channels. Major Initiatives My WhatsApp Lending No. +91-9633600800 Conversational Banking with Feddy: Non-Individual Savings Accounts in Sourcing of Pre-Approved Credit Card FedCorp: through WhatsApp: • Savings Accounts maintained by No
Slide 28: Digital migration
Digital migration Branch vs. Digital Transactions (₹ in Lakh)* Corporate Digital Products - Active Users1 94.30% 45,0 00 40,482 70 00 250 93.82% 219.00 94% 38,065 40,0 00 35,541 6,059 32,189 33,178 60 00 185.40 93% 5563 200 5,111 35,0 00 92.42% 4,744 50 00 92% 4,505 30,0 00 150 126.00 91.80% 127.28
Slide 29: Strengthening our presence in Transaction Banking offerings
Strengthening our presence in Transaction Banking offerings Enhanced Adoption of Digital Channels across Corporate Clients Improving Adoption 95.18% of the total transactions are processed digitally in Mar '24 Improving Digital Volumes Growing Trade Solutions More than 10 Mn NEFT payments ➢ Handled
Slide 30: Digital lending and card spends
Digital lending and card spends Digital Personal Card spends (₹ in Cr)1 Loans For Mar 24 1,30,000 3,80 0 1,6 00 1,489 1,483 2,1 00 Credit Cards – Market share*: 1,21,718 1,469 1,462 1,429 1,17,607 1,20,000 3,60 0 1,4 00 1,9 00 Cards O/s: Spends: 1,713 1,701 1,07,872 1.32% 1.35% 1,10,000 3,40 0 1,2 0
Slide 31: Appendix
Appendix YOUR PERFECT BANKING PARTNER
Slide 32: Balance sheet & shareholding pattern
Balance sheet & shareholding pattern ₹ in Cr Dec-23 Mar-24 Share holding pattern (Mar-24) LIABILITIES Capital 487 487 Reserves & surplus 27,685 28,607 Deposits 2,39,591 2,52,534 Borrowings 17,317 18,026 31% 35% Other liabilities & provisions 11,133 8,657 TOTAL 2,96,213 3,08,312 ASSETS Cash & balance
Slide 33: Financials
Financials ₹ in Cr Q4 FY23 Q3 FY24 Q4 FY24 Q-o-Q Y-o-Y Interest income 4,721 5,730 5,978 4% 27% Interest expenses 2,811 3,607 3,783 5% 35% Net interest income 1,909 2,123 2,195 3% 15% Other income 734 863 754 -13% 3% Operating expense 1,309 1,549 1,839 19% 41% Total income 5,455 6,593 6,732 2% 23% T
Slide 34: Key Indicators
Key Indicators Q4 FY23 Q1 FY24 Q2 FY24 Q3 FY24 Q4 FY24 Book Value 101.22 105.04 110.70 115.41 119.45 (Per Share in ₹) Shareholder value EPS 17.30 16.22 16.57 16.54 14.97 (annualized) CASA + Deposits <= ₹2cr Granularity (% of Total Deposits) 84% 82% 81% 81% 80% ROA % 1.45 1.30 1.36 1.39 1.22 Profitab
Slide 35: Fresh slippages break up
Fresh slippages break up ₹ in cr Fresh slippages NPA Composition Security receipts Retail Agri BuB CV/CE CoB CIB Q3 FY24 Q4 FY24 Book Value 496 Business NPA NPA 479 36 Gross NPA 411 402 436 4 78 Retail 1,515 1,580 Agri 934 900 58 101 365 BuB 998 940 5 49 352 CV/CE 51 51 42 14 23 91 7 7 CoB 681 602 1
Slide 36: 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 (Mar-24)* MFIs, HFCs and NBFCs other than DFIs 10.58% Other Services 3.12% Services 20.58% Trade 2.89% Real Estate Activities (Other than 2.30% Residential Mortgages) Transport Operators 0.68% Indu
Slide 37: Top 20 exposure as a % of portfolio
Top 20 exposure as a % of portfolio Top 20 Depositors and Borrowers exposure as a % of total portfolio 11.15 10.94 10.71 10.77 10.89 10.65 10.65 10.32 6.87 7.03 6.66 5.83 5.19 4.51 3.35 3.42 Q1 FY23 Q2 FY23 Q3 FY23 Q4 FY23 Q1 FY24 Q2 FY24 Q3 FY24 Q4 FY24 % Top 20 Depositors % Top 20 Borrowers 36
Slide 38: Group companies
Group companies Fedbank Financial Services Subsidiary Federal Operations & Services (FedServ) Subsidiary 61.6% 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 39: Fedbank Financial Services Subsidiaries – Q4FY24 update
Fedbank Financial Services Subsidiaries – Q4FY24 update NPAs Gross NPA and Net NPA stands Disbursals KEY HIGHLIGHTS at 1.7% & 1.3%, respectively. ₹13,578.70 Cr disbursed in FY24, reflecting growth of ❑ 61.6% stake held by Federal 26% YoY. Bank Limited ❑ For FY24, ROA and ROE reported at 2.4% and 13.
Slide 40: 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 Diversity & Inclusion Employee Recognition Governance Structure ESG
Slide 41: Public Commitments
ESG performance snapshot Finance women Public Commitments Grow green portfolio In-house solar power Water conservation Bank Premises 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 42: Award-winning franchise & other initiatives / highlights of Q4
Award-winning franchise & other initiatives / highlights of Q4 Ranked 13th in “Future Ready Received HR Award for “Future of Work, Workplaces” Workforce and Workplace (Large Segment) ” By Fortune India and CIEL HR. at People Pioneers Award 2024 Recognized Best Bank in Fintech initiative - ESG Champi
Slide 43: 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 42
Slide 44: Thank You
Thank You 43