Federal Bank Ltd. (india) · NSE:FEDERALBNK
Federal Bank Ltd. (india) — The Federal Bank — Q3 FY2024 Earnings Presentation
40 slides from Federal Bank Ltd. (india)'s earnings presentation, Jan 16, 2024
Slide 1: Investor Presentation cover letter to stock exchanges
Secretarial Department SEC/LODR/379/2023-24 16.01.2024 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 Q3 FY 2024
Investor Information Q3 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 10-20 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* (%) 15.91 15.72 2,39,591 1,99,185 14.80 2,32,868 YoY growth: 19% 1,92,817 2,01,408 1,68,173 QoQ growth: 3% YoY growth: 18% QoQ g
Slide 6: While maintaining asset quality and expanding distribution capabilities
… while maintaining asset quality and expanding distribution capabilities ASSET QUALITY REACH KEY CALLOUTS NPAs (%): GNPA NNPA Branches / ATMs: (Dec-23) Investment from IFC to the tune of 958 cr 69.19 71.03 71.08 2.43 1,418 / 1,962* Successful listing of Fedfina 2.26 2.29 IPO Alternate channels: 0.7
Slide 7: Key ratios
Key ratios Healthy operating performance RoA (%)* RoE (%)* Net interest margin (%)* 1.45 1.39 17.48 3.55 1.33 1.30 1.36 3.36 15.91 15.73 15.72 3.20 3.22 3.19 14.80 Q3 FY23 Q4 FY23 Q1 FY24 Q2 FY24 Q3 FY24 Q3 FY23 Q4 FY23 Q1 FY24 Q2 FY24 Q3 FY24 Q3 FY23 Q4 FY23 Q1 FY24 Q2 FY24 Q3 FY24 Cost to income r
Slide 8: Key P&L parameters
Key P&L parameters ₹ in cr Net interest income Other income 2,056 2,123 863 1,957 1,909 1,919 734 732 730 534 Q3 FY23 Q4 FY23 Q1 FY24 Q2 FY24 Q3 FY24 Q3 FY23 Q4 FY23 Q1 FY24 Q2 FY24 Q3 FY24 Fee income Net profit 660 642 1,007 543 542 535 954 903 854 804 Q3 FY23 Q4 FY23 Q1 FY24 Q2 FY24 Q3 FY24 Q3 FY2
Slide 9: Comparison: Y-o-Y
Comparison: Y-o-Y ₹ in cr Retail Wholesale Retail# Agri# BuB# CVCE# MFI# COB# CIB# Advances 20% 27% 18% 66% 161% 26% 14% 54,025 -> 65,041 20,991 -> 26,647 14,160 -> 16,680 1,841 -> 3,057 1,055 -> 2,754 16,489 -> 20,774 62,929 -> 71,978 CASA CASA Ratio NRE Deposits Total Deposits -361 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 5% 6% 4% 12% 18% 5% 2% 62,009 -> 65,041 25,115 -> 26,647 15,997 -> 16,680 2,734 -> 3,057 2,325 -> 2,754 19,729 -> 20,774 70,559 -> 71,978 CASA CASA Ratio NRE Deposits Total Deposits -54 Deposits 1% bps 2% 3%
Slide 11: Liability trends
Liability trends Gaining traction with more granularity Deposits (₹ in cr) CA & SA (₹ in cr) and CASA ratio (%) CASA + Deposits <= 2Cr Other 2,39,591 YoY growth: 19% CA SA (Incl Bespoke) 2,13,386 30.63 2,01,408 33.81% 36.94% 32.68% 34.24% 1,81,701 1,72,644 73,388 67,121 69,741 68,967 84% 81% 88% 58,
Slide 12: Credit portfolio distribution
Credit portfolio distribution Stable and diversified loan growth Gross Advances (₹ in cr) Gross Advances mix (Dec-23) Retail Book# Wholesale Book# Retail Book# Wholesale Book# 55% 2,02,475 1,77,377 1,71,043 1,47,639 92,752 1,34,877 82,699 79,418 61,779 66,744 YoY growth: 17% 45% 1,14,178 80,895 95,7
Slide 13: Retail Banking
Retail Banking Delivering strong performance Retail advances mix (Dec-23) Retail advances mix (Excl Agri, BuB, CV/CE & MFI) (₹ in cr) 2% 3% 8,723 2,778 15 % 7,456 1,486 3,647 7,404 1,100 6,775 7,209 270 2,393 1,957 7,151 5,448 5,129 4,540 1,809 4,229 1,751 4,313 4,760 3,603 4,526 11,352 57 % 5,653 9
Slide 14: Wholesale Banking
Wholesale Banking Better coverage with sharper focus Wholesale advances mix (Dec-23) Wholesale advances (₹ in cr) Success Snippets CoB# CIB# ● We forged a lending relationship amounting to around CoB# CIB# 82,699 92,752 79,418 30 crores within a Multiple Banking framework with a 61,779 66,744 promin
Slide 15: High margin lending products
High margin lending products High Yielding Segment1 Credit Cards 3 2,778 153% Gross advances 24.6% YoY growth (INRcr) 21.4% Gross Advances Dec-23 Personal Loans 3 3,647 Dec-22 share 86% Gross advances YoY growth (INRcr) Digital loan platform 78.6% 75.4% MSME (BuB + CoB) 37,454 707Cr 22% Gross advanc
Slide 16: Select high margin lending products
Select high margin lending products CV / CE Gold loans Micro finance 2,754 3,057 23,917 2,325 Portfolio (₹ in cr) 2,734 YoY 22,608 YoY YoY 19,520 1,841 66% 23% 161% 1,055 QoQ QoQ QoQ 12% 6% 18% Q3 FY23 Q2 FY24 Q3 FY24 Q3 FY23 Q2 FY24 Q3 FY24 Q3 FY23 Q2 FY24 Q3 FY24 Disbursements: PSL: No of Accounts
Slide 17: 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 0 1,229 1,205 0 160 1,284 Provision Coverage Ratio 1,569 Increases to 71.08% 3,536 2,830 3,040 2,200 1,618 Recovery & Upgradat
Slide 18: Asset quality trends (cont'd)
Asset quality trends (cont’d) GNPA (%) NNPA (%) PCR (%)1 0.73 0.69 0.69 71.03 71.08 2.43 2.36 2.38 0.64 0.64 2.26 2.29 70.02 70.02 69.19 Q3 FY23 Q4 FY23 Q1 FY24 Q2 FY24 Q3 FY24 Q3 FY23 Q4 FY23 Q1 FY24 Q2 FY24 Q3 FY24 Q3 FY23 Q4 FY23 Q1 FY24 Q2 FY24 Q3 FY24 Slippage rate (%) Risk adjusted NIM (%)* Cr
Slide 19: 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% 9% Q3 FY24 8% 14% 8% 2% Q3 FY24 5% Q2 FY24 5% 17% 32% 17% 32% 76% Q2 FY24 81% 17% 17% A & Above BBB <BBB OTHERS 29%
Slide 20: Fee income / other income
Fee income / other income Diversified and granular fee income ₹ in Cr Q3 FY23 Q4 FY23 Q1 FY24 Q2 FY24 Q3 FY24 QoQ YoY Loan processing fee 129 132 158 175 149 -15% 16% Cards 128 137 153 175 181 3% 42% Para banking 41 45 27 52 63 22% 54% Banking commissions & exchanges 55 92 65 73 72 -2% 31% General s
Slide 21: Capital position
Capital position Robust capital position marked by a self-sustaining capital structure and ample buffers. ₹ in Cr Sep-23 Dec-23 Risk weighted assets Credit risk 148,031 158,981 Market risk 6,370 7,100 Operational risk 14,992 14,992 Total RWA 169,393 181,073 Tier-I capital funds 23,362 24,407 Tier-II
Slide 22: Distribution: Deriving efficiency from footprint
Distribution: Deriving efficiency from footprint Continuous investment in expanding Pan India footprint 1 Dec-22 Dec-23 1 30 3 2 Branches 1,333 1,418 26 27 1 ATMs/ 1,962 29 1,896 13 14 Recyclers* 8 2 2 58 9 33 1 LITE BRANCH 18 4 1 HEAVY DISTRIBUTION Dec-23 2 25 13% Driven by alternate channels 18% 1
Slide 23: 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 ✓ Secured Credit Cards Support ✓ NTB Unsecured Credit Cards Systems
Slide 24: Growth through partnerships
Growth through partnerships Partners Share in FY’24 Key metrics Cards Issued: Spends: 4.1 3.1 Co-branded 1.6 1.9 2.2 2.3 1.3 1.6 credit cards 1.0 1.0 Card programs under CUG1 77% Dec-22 Mar-23 Jun-23 Sep-23 Dec-23 Dec-22 Mar-23 Jun-23 Sep-23 Dec-23 14% # Accounts: CASA Balance: 1.1 1.1 1.1 Savings 1
Slide 25: Digitization as a Multiplier
Digitization as a Multiplier 381 Edu. Institutions 310 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 22K ₹ cr + Corporate) 508 quarter Retail Mobil
Slide 26: Digitization as a Multiplier: Major Initiatives
Digitization as a Multiplier Major Initiatives Maintaining strong position in Payments & Digital Space IMPS Simplified Flow: SCAN & PAY ⚫ NPCI has undertaken a comprehensive overhaul of the P2P and IMPS transaction flow, enhancing user-friendliness by replacing MMID with the associated bank name. In
Slide 27: Digital migration
Digital migration Branch vs. Digital Transactions (₹ in Lakh)* Corporate Digital Products - Active Users1 200 185.40 95% 38,065 35,541 40 ,00 0 60 00 32,189 33,178 5,563 94% 146.91 93.82% 5,111 35 ,00 0 4,744 50 00 150 126.00 127.28 93% 30 ,00 0 4,505 108.65 92.42% 4,096 92% 40 00 91.80% 25 ,00 0 10
Slide 28: Digital lending and card spends
Digital lending and card spends Digital Personal Card spends (₹ in Cr)1 Loans 1,17,607 1,489 1,20 ,000 3,80 0 1,60 0 1,50 0 1,474 1,469 1,483 1,429 1,40 0 1,07,872 3,60 0 1,40 0 1,10 ,000 3,296 1,224 * 1,30 0 3,40 0 1,20 0 3,145 1,00 ,000 1,20 0 1,091 1,109 91,790 3,20 0 1,00 0 87,922 1,10 0 90,0 00
Slide 29: Appendix
Appendix YOUR PERFECT BANKING PARTNER
Slide 30: Balance sheet & shareholding pattern
Balance sheet & shareholding pattern ₹ in Cr Sep-23 Dec-23 Share holding pattern (Dec-23) LIABILITIES Capital 470 487 Reserves & surplus 25,649 27,685 Deposits 2,32,868 2,39,591 25% Borrowings 19,181 17,317 36% Other liabilities & provisions 9,258 11,133 TOTAL 2,87,426 2,96,213 1% ASSETS Cash & bala
Slide 31: Financials
Financials ₹ in Cr Q3 FY23 Q2 FY24 Q3 FY24 Q-o-Q Y-o-Y Interest income 4,433 5,455 5,730 5% 29% Interest expenses 2,477 3,399 3,607 6% 46% Net interest income 1,957 2,056 2,123 3% 9% Other income 534 730 863 18% 62% Operating expense 1,216 1,462 1,549 6% 27% Total income 4,967 6,186 6,593 7% 33% Tot
Slide 32: Key Indicators
Key Indicators Q3 FY23 Q4 FY23 Q1 FY24 Q2 FY24 Q3 FY24 Book Value 96.74 101.22 105.04 110.70 115.41 (Per Share in ₹) Shareholder value EPS 15.09 17.30 16.22 16.57 16.54 (annualized) CASA + Deposits <= ₹2cr Granularity (% of Total Deposits) 88% 84% 82% 81% 81% ROA % 1.33 1.45 1.30 1.36 1.39 Profitabi
Slide 33: Fresh slippages break up
Fresh slippages break up ₹ in cr Fresh slippages NPA Composition Security receipts Retail Agri BuB CV/CE CoB CIB Q2 FY24 Q3 FY24 Book Value 496 Business NPA NPA 479 36 Gross NPA 411 411 436 4 78 Retail 1,425 1,515 398 Agri 942 934 58 101 6 365 BuB 996 998 5 49 81 CV/CE 39 51 42 14 91 7 CoB 664 681 9
Slide 34: 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 (Dec-23)* MFIs, HFCs and NBFCs other than DFIs 11.21% Trade 3.19% Services 19.77% Real Estate Activities (Other than 2.07% Residential Mortgages) Other Services 1.68% Transport Operators 0.61% Indu
Slide 35: Group companies
Group companies Fedbank Financial Services Subsidiary Federal Operations & Services (FedServ) Subsidiary 61.7% 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 36: 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 37: 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 38: Award-winning franchise & other initiatives / highlights
Award-winning franchise & other initiatives / highlights Federal Bank is the 1st Runner-Up in the Federal Bank Announces Strategic Collaboration with Diversity & Inclusion Excellence Award NeML for Enhanced eProcurement and eAuction Integration The Associated Chambers Of Commerce And Industry Of Ind
Slide 39: 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 40: Thank You
Thank You 39