Federal Bank Ltd. (india) · NSE:FEDERALBNK
Federal Bank Ltd. (india) — The Federal Bank — Q1 FY2025 Earnings Presentation
44 slides from Federal Bank Ltd. (india)'s earnings presentation, Jul 24, 2024
Slide 1: Covering letter to stock exchanges: Investor Presentation
Secretarial Department SEC/LODR/153/2024-25 24.07.2024 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
Slide 2: Investor Information Q1 FY 2025
NET PROFIT NET INTEREST OPERATING PROFIT INCOME HIGHEST EVER OTHER INCOME Investor Information Q1 FY 2025
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 10-20 03 Distribution strategy and digital migration 21-27 04 Appendix 29-38
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 2,66,065 2,20,807 15.73 2,09,403 2,22,496 YoY growth: 20% 1,83,487 13.64 12.75 QoQ growth: 5% YoY growth: 20% QoQ g
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: (Jun-24) Remarkable Balance Sheet Growth Deposit Growth stands at 5.36% QoQ 1,518 / 2,041* 70.02 71.08 70.79 2.38 Net Advance growth stands at 5.45%
Slide 7: Key ratios
NIM holds steady at 3.16% amidst intense deposit growth, Key ratios with ROA and ROE showing sequential QoQ improvement. RoA (%)* RoE (%)* Net interest margin (%)* 3.20 3.22 3.19 3.21 3.16 1.36 1.39 15.73 15.72 1.30 1.27 14.80 1.22 13.64 12.75 Q1 FY24 Q2 FY24 Q3 FY24 Q4 FY24 Q1 FY25 Q1 FY24 Q2 FY24
Slide 8: Key P&L parameters
Achieved highest-ever Net Interest Income, Key P&L parameters complemented by a 21.87% YoY surge in Fee Income ₹ in cr Net interest income Other income Highest ever Highest ever 2,195 2,292 915 2,056 2,123 863 1,919 732 730 754 Q1 FY24 Q2 FY24 Q3 FY24 Q4 FY24 Q1 FY25 Q1 FY24 Q2 FY24 Q3 FY24 Q4 FY24
Slide 9: Comparison: Y-o-Y
Comparison: Y-o-Y ₹ in cr Retail Wholesale Retail* BuB* CVCE* COB* 20% 20% 52% 24% Advances 54,074 -> 65,094 Gold*^ 15,076 -> 18,159 Agri & Allied*^ 2,457 -> 3,728 MFI* 18,339 -> 22,687 CIB* 31% 14% 107% 12% 20,927 -> 27,431 6,751 -> 7,684 1,828 -> 3,788 68,262 -> 76,589 CASA CASA Ratio NRE Deposits
Slide 10: Comparison: Q-o-Q
Comparison: Q-o-Q ₹ in cr Retail Wholesale Retail* BuB* CVCE* COB* 4% 6% 8% 6% Advances 62,720 -> 65,094 Gold*^ 17,108 -> 18,159 Agri & Allied*^ 3,442 -> 3,728 MFI* 21,457 -> 22,687 CIB* 9% 2% 10% 4% 25,226 -> 27,431 7,514 -> 7,684 3,449 -> 3,788 73,596 -> 76,589 CASA CASA Ratio NRE Deposits Total D
Slide 11: Liability trends
Liability trends Cost of deposits contracts while maintaining an impressive 5.36% QoQ growth Deposits (₹ in cr) CA & SA (₹ in cr) and CASA ratio (%) CASA + Deposits < 3Cr Other YoY growth: 20% CA SA (Incl Bespoke) 2,66,065 2,52,534 29.27 29.38 31.85 2,22,496 36.94 32.68 2,13,386 74,200 77,883 67,121
Slide 12: Credit portfolio distribution
Retailization of the portfolio continues Credit portfolio distribution with higher growth in Retail Book. Gross Advances mix (Jun-24) Retail Book* Wholesale Book* Gross Advances (₹ in cr) 56% Retail Book* Wholesale Book* 44% 2,24,161 2,12,559 1,86,593 1,77,377 99,276 YoY growth: 15% 1,47,639 95,083
Slide 13: Credit portfolio distribution
Credit portfolio distribution Loan book by interest rate type(%) Retail & SME as % of loan book (₹ in cr) 9% 2,50,000 51.0% 11% 50.6% 2,00,000 50.5% 52% 29% 1,50,000 49.9% 49.9% 50.0% EBM Fixed MCLR Others 49.5% 1,00,000 49.5% 49.2% Yield on advances (%) 50,000 49.0% 9.48 9.43 7.92 0 48.5% Q1 FY24 Q
Slide 14: Retail Banking
Retail Banking Overall Retail Portfolio crosses milestone figure of Rs. 65,000 Cr. Retail book mix (Mar-24) Retail advances mix (Excl Gold, BuB, Agri, CV/CE & MFI) 3%3% (₹ in cr) 9,015 8,738 6% 3,240 3,060 3,928 3,845 7,729 7,392 1,877 7,800 14% 2,393 1,486 7,302 2,799 6,699 5,448 5,770 1,751 270 12
Slide 15: Wholesale Banking
Wholesale Banking Driving transformative and comprehensive growth Wholesale portfolio (₹ in cr) Wholesale portfolio mix (Jun-24) CoB* CIB* 1,00,897 1,05,305 91,564 Q1 FY25, 86,723 CoB, 22 68,985 Q4 FY24, 79,236 82,301 Q4 FY24, CoB, 23 69,693 73,144 CIB, 77 54,243 Q1 FY25, CIB, 78 14,742 17,031 21,66
Slide 16: High margin lending products
High margin lending products High Yielding Segment1 Credit Cards 3 3,240 73% Gross advances 24.8% YoY growth (INRcr) 22.7% Gross Advances share Jun-24 Personal Loans 3 3,928 Jun-23 +210 bps 40% Gross advances YoY growth (INRcr) Digital loan platform 78.2% 75.2% MSME (BuB + CoB) 40,846 256 Cr 22% Gro
Slide 17: Select high margin lending products
Select high margin lending products CV / CE Gold loans Micro finance 3,442 3,728 25,226 27,431 3,447 3,788 Portfolio (₹ in cr) YoY 20,927 YoY YoY 2,457 52% 31% 1,825 108% QoQ QoQ QoQ 8% 9% 10% Q1 FY24 Q4 FY24 Q1 FY25 Q1 FY24 Q4 FY24 Q1 FY25 Q1 FY24 Q4 FY24 Q1 FY25 Disbursements: PSL: No of Accounts:
Slide 18: Asset quality trends
Asset quality steadfastly remains robust across all segments. Asset quality trends Lowest GNPA in last 36 quarters Std Restructured Ac Net NPA Net SR ₹ in cr Asset quality continues to remain robust across 69 all segments 1,393 0 0 1,205 0 1,275 0 Provision Coverage Ratio 1,255 1,330 maintained at 7
Slide 19: Asset quality trends (cont'd)
Asset quality trends (cont’d) GNPA (%) NNPA (%) PCR (%)1 2.38 2.29 71.08 71.08 2.26 71.03 2.13 2.11 0.69 0.64 0.64 70.79 0.60 0.60 70.02 Q1 FY24 Q2 FY24 Q3 FY24 Q4 FY24 Q1 FY25 Q1 FY24 Q2 FY24 Q3 FY24 Q4 FY24 Q1 FY25 Q1 FY24 Q2 FY24 Q3 FY24 Q4 FY24 Q1 FY25 Slippage rate (%) Risk adjusted NIM (%)* Cr
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 2% 8% Q1 FY25 8% 13% 7% 2% Q1 FY25 5% Q4 FY24 5% 17% 32% 17% 32% 78% Q4 FY24 82% 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 Q1 FY24 Q2 FY24 Q3 FY24 Q4 FY24 Q1 FY25 QoQ YoY Loan processing fee 158 175 149 186 174 -6% 10% Cards 153 175 181 207 191 -7% 25% Para banking 27 52 63 56 46 -17% 71% Banking commissions & exchanges 65 73 72 70 72 2% 11% General s
Slide 22: Capital position
Capital position Strong and Robust, bolstered by solid internal generations. ₹ in Cr Mar-24 Jun-24 Risk weighted assets Credit risk 167,454 177,022 Market risk 7,229 2,629 Operational risk 14,992 17,484 Total RWA 189,675 197,135 Tier-I capital funds 27,707 27,932 Tier-II capital funds 2,889 2,762 To
Slide 23: Distribution: Deriving efficiency from footprint
Distribution: Deriving efficiency from footprint Continuous investment in expanding Pan India footprint 1 Consistently expanding existing network. Jun-23 Jun-24 1 14 new Outlets opened in Q1FY25 36 2 Banking 1,518 3 1,358 Outlets# 29 27 2 ATMs/ 2,041 15 33 16 1,920 Recyclers* 10 2 3 61 2 LITE BRANCH
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 partners Support Systems 23
Slide 25: Growth through partnerships
Growth through partnerships Partners Growth Share in FY’25 Key metrics Cards Issued: ENR: 1.6 1.7 1.4 1.4 1.4 1.5 1.2 Co-branded 1.0 1.0 1.2 credit cards 1 57% Jun-23 Sep-23 Dec-23 Mar-24 Jun-24 Jun-23 Sep-23 Dec-23 Mar-24 Jun-24 # Accounts: CASA Balance: 3.6%2 1.04 1.03 1.3 1.4 1.4 1.01 1.2 Savings
Slide 26: Digitization as a Multiplier
Digitization as a Multiplier 447 Edu. Institutions 332 HUMAN AT THE CORE Feddy is Live on onboarded to Fee RPA Process collection Solution “Careerbook” 94% running Approx 5.4 Lakh transactions queries answered Serviced by Feddy in this Digitally (Retail 19K ₹ cr + Corporate) 550 quarter Retail Mobil
Slide 27: Digitization as a Multiplier: Major Initiatives
Digitization as a Multiplier Major Initiatives Persistently pioneering innovation. Milestones UPI for Sole WAVE Credit Card Proprietorship Federal RuPay Wave Credit Card is a digital-only Current Accounts floater card linked to the primary credit Card. Customers can activate any of the UPI applicati
Slide 28: Digital migration
Digital migration Branch vs. Digital Transactions (₹ in Lakh)* Corporate Digital Products - Active Users1 40,482 42,060 94.30% 45 ,00 0 70 00 250 93.82% 219.00 93.60% 94% 38,065 6,444 40 ,00 0 35,541 6,059 33,178 60 00 93% 5563 200 185.40 5,111 35 ,00 0 92.42% 171.10 4,744 50 00 92% 30 ,00 0 150 91.
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 93.60% of the total transactions are processed Improving Digital Volumes digitally in June'24 More than 16 Lakh API calls recorded in Q1 FY25 Growing Trade So
Slide 30: Digital lending and card spends
Digital lending and card spends Digital Personal Card spends (₹ in Cr)1 Loans 1,30,000 3,80 0 16 00 21 00 Credit Cards – Market share 1,469 1,483 1,462 1,21,718 1,429 1,380 1,20,000 1,17,607 1,16,109 3,60 0 14 00 19 00 Cards O/s: Spends: 1,713 1,701 1,07,872 1,10,000 3,40 0 12 00 1,577 17 00 1.36% 1
Slide 31: Appendix
Appendix YOUR PERFECT BANKING PARTNER
Slide 32: Balance sheet & shareholding pattern
Balance sheet & shareholding pattern ₹ in Cr Mar-24 Jun-24 Share holding pattern (Jun-24) LIABILITIES Capital 487 490 Reserves & surplus 28,607 30,075 Deposits 2,52,534 2,66,065 25% Borrowings 18,026 21,710 35% Other liabilities & provisions 8,657 9,632 TOTAL 3,08,312 3,27,971 2% ASSETS Cash & balan
Slide 33: Financials
Financials ₹ in Cr Q1 FY24 Q4 FY24 Q1 FY25 Q-o-Q Y-o-Y Interest income 5,025 5,978 6,331 6% 26% Interest expenses 3,106 3,783 4,039 7% 30% Net interest income 1,919 2,195 2,292 4% 19% Other income 732 754 915 21% 25% Operating expense 1,349 1,839 1,706 -7% 27% Total income 5,757 6,732 7,246 8% 26% T
Slide 34: Key Indicators
Key Indicators Q1 FY24 Q2 FY24 Q3 FY24 Q4 FY24 Q1 FY25 Book Value 105.04 110.70 115.41 119.45 123.80 (Per Share in ₹) Shareholder value EPS 16.22 16.57 16.54 14.97 16.60 (annualized) CASA + Deposits < ₹3Cr Granularity (% of Total Deposits) 84% 83% 83% 82% 80% ROA % 1.30 1.36 1.39 1.22 1.27 Profitabi
Slide 35: Fresh slippages break up
Fresh slippages break up ₹ in cr Fresh slippages NPA Composition Retail Agri BuB CV/CE CoB CIB Q4 FY24 Q1 FY25 496 500 479 Business NPA NPA 36 Gross NPA 450 4 417 Retail 1,580 1,723 78 400 101 33 Agri 900 930 365 49 12 352 BuB 940 954 350 42 14 23 62 CV/CE 51 59 7 7 300 100 74 CoB 602 620 55 68 71 C
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 (Jun-24)* MFIs, HFCs and NBFCs other than DFIs 10.24% Trade 3.09% Industry 20.24% Other Services 2.87% Real Estate Activities (Other than 2.53% Residential Mortgages) Transport Operators 0.63% Serv
Slide 37: Top 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 10.03 7.51 6.87 7.03 6.66 5.83 5.19 4.51 3.35 3.42 Q1FY23 Q2FY23 Q3FY23 Q4FY23 Q1FY24 Q2FY24 Q3FY24 Q4FY24 Q1FY25 % Top 20 Depositors % Top 20 Borrow
Slide 38: Group companies
Group companies Fedbank Financial Services Subsidiary Federal Operations & Services (FedServ) Subsidiary 61.4% 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 – Q1FY25 update
Fedbank Financial Services Subsidiaries – Q1FY25 update NPAs Gross NPA and Net NPA stands Disbursals at 2.0% & 1.6%, respectively. ₹5004.60 Cr disbursed in Q1FY25, KEY HIGHLIGHTS reflecting growth of 68.8% YoY. ❑ 61.4% stake held by Federal Bank Limited ❑ For Q1FY25, ROA and ROE reported at Low Cred
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: ESG performance snapshot: 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
Award-winning franchise & other initiatives / highlights Wins Gold for Product Innovation, Modern Federal Bank featured in ETs list of “Future Ready Technologies-led Innovation and Organizations 2024-25 (Large Scale Enterprises) ” Transformation Excellence List of Future Ready Organizations 2024-25
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