Federal Bank Ltd. (india) · NSE:FEDERALBNK
Federal Bank Ltd. (india) — The Federal Bank — Q1 2024 Earnings Presentation
38 slides from Federal Bank Ltd. (india)'s earnings presentation, Jul 13, 2023
Slide 1: Investor Information Q1 FY 2024
Investor Information Q1 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 29-37
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 (%) 17.48 15.73 2,22,496 1,74,447 1,83,487 12.70 2,13,386 YoY growth: 21% 1,83,355 YoY growth: 21% 1,51,689 QoQ growth: 5% QoQ gro
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: End-to-End Digital Personal Loan 65.03 70.02 70.02 platform introduced as a DIY journey 2.69 2.36 2.38 1,366 / 1,920* (Jun-23) launched to target NTB cus
Slide 6: Key ratios
Key ratios RoA (%)* RoE (%)* Net interest margin (%)* 1.45 17.48 3.49 1.33 1.30 15.91 3.22 3.30 3.31 1.21 15.73 3.15 1.10 14.36 12.70 Q1 FY23 Q2 FY23 Q3 FY23 Q4 FY23 Q1 FY24 Q1 FY23 Q2 FY23 Q3 FY23 Q4 FY23 Q1 FY24 Q1 FY23 Q2 FY23 Q3 FY23 Q4 FY23 Q1 FY24 Cost to income ratio (%) NNPA (%) PCR (%) 0.94
Slide 7: Key P&L parameters
Key P&L parameters ₹ in cr Net interest income Other income 734 732 1,957 1,909 1,919 610 1,762 534 1,605 453 Q1 FY23 Q2 FY23 Q3 FY23 Q4 FY23 Q1 FY24 Q1 FY23 Q2 FY23 Q3 FY23 Q4 FY23 Q1 FY24 Fee income Net profit 540 543 542 535 903 854 804 441 704 601 Q1 FY23 Q2 FY23 Q3 FY23 Q4 FY23 Q1 FY24 Q1 FY23
Slide 8: Comparison: Y-o-Y
Comparison: Y-o-Y ₹ in cr Retail Wholesale Retail Agri BuB CVCE COB CIB Advances 17% 26% 18% 72% 20% 22% 49,857 -> 58,422 19,988 -> 25,112 12,814 -> 15,098 1,425 -> 2,457 15,349 -> 18,365 54,959 -> 67,140 CASA CASA Ratio NR Deposits Total Deposits -499 Deposits 5% bps 5% 21% 67,540 -> 70,854 36.84 -
Slide 9: Comparison: Q-o-Q
Comparison: Q-o-Q ₹ in cr Retail Wholesale Retail Agri BuB CVCE COB CIB Advances 4% 8% 6% 12% 6% 4% 56,028 -> 58,422 23,356 -> 25,112 14,220 -> 15,098 2,186 -> 2,457 17,276 -> 18,365 64,309 -> 67,140 CASA CASA Ratio NR Deposits Total Deposits -83 Deposits 2% bps 0.3% 4% 69,741 -> 70,854 32.68 -> 31.
Slide 10: Liability trends
Liability trends Deposits (₹ in cr) CA & SA (₹ in cr) and CASA ratio (%) CASA + deposits <= INR 2cr Others CA SA 2,22,496 2,13,386 33.81% 36.94% 32.68% 36.84% 31.85% 1,81,701 1,83,355 1,72,644 YoY growth: 171% 67,122 69,741 67,539 70,854 84% 82% QoQ growth: 16% 92% 92% 58,370 88% YoY growth: 8% QoQ
Slide 11: Credit portfolio distribution
Credit portfolio distribution Gross Advances (₹ in cr) Gross Advances mix (Jun-23) Retail Wholesale Retail Wholesale 54.2% 1,86,593 1,77,377 1,47,639 1,54,392 1,34,877 81,585 85,505 66,805 70,308 45.8% 62,000 YoY growth: 21% QoQ growth: 5% 95,791 84,083 1,01,088 72,877 80,834 YoY growth: 20% QoQ gro
Slide 12: Retail banking
Retail banking Retail advances mix (Jun-23) Retail advances mix (Excl Agri, BuB & CV/CE) (₹ in cr) 2% 15% 8,740 9,549 2,393 7,589 2,802 7,395 5,448 5,770 6,986 1,727 1,809 4,229 1,750 4,366 4,447 4,382 3,603 4,573 5,224 58% 5,730 9,984 10,389 25% 8,762 8,453 7,852 21,443 25,097 22,108 25,528 18,823
Slide 13: Wholesale banking
Wholesale banking Wholesale advances mix (Jun-23) Wholesale advances (₹ in cr) CoB Corporate (CIB) CoB Corporate (CIB) 85,505 81,585 70,308 66,805 21% 62,000 64,309 67,140 52,091 54,959 48,738 13,262 14,714 17,276 15,349 18,365 79% Mar-21 Mar-22 Mar-23 Jun-22 Jun-23 ● CIB grew by 22% YoY and 4% QoQ
Slide 14: High margin lending products
High margin lending products Credit Cards 1,877 High Yielding Segment1 267% Gross advances YoY growth (INRcr) 32.7% 33.9% Personal Loans 2,802 Gross Advances 62% Gross advances share Jun-23 YoY growth (INRcr) Digital loan platform Jun-22 +120 bps 67.3% 66.1% MSME (BuB + CoB) 33,463 26K+ 19% Gross ad
Slide 15: Select high margin lending products
Select high margin lending products CV / CE Gold loans Micro finance 2,457 1,823 20,927 Portfolio (₹ in cr) 2,186 YoY YoY 1,435 YoY 19,841 1,425 72% 13% 268% QoQ 18,478 QoQ 496 QoQ 12% 6% 27% Jun-22 Mar-23 Jun-23 Jun-22 Mar-23 Jun-23 Jun-22 Mar-23 Jun-23 Disbursements: PSL: No of Accounts: LTV: Reac
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 1,393 0 66 1,205 160 1,420 0 Provision Coverage Ratio 1,569 1,275 1.00 stable at 70.02% 3,536 2,830 3,366 2,568 1,618 Recovery & Upgradation Mar-21 Mar-22 Mar-23 Jun-22 Jun
Slide 17: Asset quality trends (cont'd)
Asset quality trends (cont’d) GNPA (%) NNPA (%) PCR (%) 0.94 2.69 70.02 70.02 2.46 2.43 2.36 2.38 0.78 69.19 0.73 0.69 0.69 67.41 65.03 Jun-22 Sep-22 Dec-22 Mar-23 Jun-23 Jun-22 Sep-22 Dec-22 Mar-23 Jun-23 Jun-22 Sep-22 Dec-22 Mar-23 Jun-23 Slippage rate (%) Risk adjusted NIM (%)* Credit costs (%)*
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 15% Q1 FY24 2% 12% 9% 2% 9% Q1 FY24 5% Q4 FY23 5% 18% 31% 18% 32% 77% 74% Q4 FY23 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 Q1 FY23 Q2 FY23 Q3 FY23 Q4 FY23 Q1 FY24 QoQ YoY Loan processing fee 103 125 129 132 158 20% 53% Cards 96 116 128 137 153 12% 59% Para banking 21 37 41 45 27 -40% 29% Banking commissions & exchanges 59 67 55 92 65 -29% 10% General
Slide 20: Capital position
Capital position ₹ in Cr Mar-23 Jun-23 Risk weighted assets Credit risk 138,753 142,131 Market risk 5,027 5,619 Operational risk 13,136 14,992 Total RWA 156,916 162,742 Tier-I capital funds 20,431 20,409 Tier-II capital funds 2,813 2,833 Total capital funds 23,245 23,242 CRAR 14.81% 14.28% Tier-I 13
Slide 21: Distribution – A Multi Pronged Approach
Distribution – A Multi Pronged Approach Continuous investment in Fintech arrangements expanding Pan India footprint Jun-22 Jun-23 Branches 1,291 1,366 Branches Digital ATMs 1,860 1,920 & many more…. LITE BRANCH Customers @ HEAVY DISTRIBUTION Core Sales / Relationship Direct Sales Share of FinTech (Y
Slide 22: Distribution: Deriving efficiency from footprint
Distribution: Deriving efficiency from footprint Expanding horizons through physical footprint 1 1 29 1 3 23 27 25 10 13 8 2 2 54 9 33 1 12 new branches 13 3 1 Jun-23 opened in this quarter 2 25 13% 17% 102 13% 17% 28 6 Mar-23 18% 18% 31 111 52% 3 52% 597 202 Metro Urban Semi-urban Rural 22
Slide 23: Innovation and growth through partnerships
Innovation and growth through partnerships Partners Particulars Key metrics Cards Issued: Spends: ✓ Targeting digitally savvy NTB 4.9x 11.7x 4.0x customers 3.1x 8.2x Co-branded 2.0x 5.2x ✓ Customer onboarding as well as credit cards the entire customer life-cycle 1.0x 1.0x 2.7x Card programs journey
Slide 24: Digitization as a Multiplier
Digitization as a Multiplier 275 Edu. Institutions 290 onboarded to Fee RPA Process collection Solution “Careerbook” 92% running transactions HUMAN AT Serviced THE CORE Feddy is Live on Digitally (Retail 17K ₹ cr + Corporate) 484 1.8 Lakh queries Retail Mobile answered by Feddy APIs made Banking ava
Slide 25: Digital initiatives
Digital initiatives CBDC SOUNDBOX COLLECTPRO SOUNDBOX SOUNDBOX SOUNDBOX One among the 13 Banks chosen by RBI to be a part Application for Rent Facility for sound of CBDC-R/e-Rupee collection and office alerts for QR project management for Merchants Apartments MAJOR INITIATIVES e-BG SOUNDBOX CRM SOUN
Slide 26: Digital migration
Digital migration Branch vs. Digital Transactions (₹ in Lakh) Corporate Digital Products - Active Users* 140 126.00 127.28 93.00 35 ,00 0 32,189 33,178 50 00 120 108.65 92.00 4,744 4,505 45 00 91.63 97.43 91.00 30 ,00 0 25,821 26,097 4,096 100 91.80 3,794 40 00 90.00 25 ,00 0 35 00 80 3,058 90.00 30
Slide 27: Digital lending and card spends
Digital lending and card spends Digital Personal Card spends (₹ in Cr) Loans 1,488 1,489 1,00 ,000 1,60 0 250 95,044 1,474 1469 91,790 1,337 95,0 00 202 3,50 0 90,761 1,40 0 90,0 00 87,922 188 200 1,20 0 85,0 00 3,00 0 163 80,557 1,00 0 80,0 00 150 2,783 2,619 2,50 0 119 75,0 00 2,586 800 70,0 00 2,
Slide 28: Appendix
Appendix FEDERAL BANK YOUR PERFECT BANKING PARTNER
Slide 29: Balance sheet & shareholding pattern
Balance sheet & shareholding pattern ₹ in Cr Mar-23 Jun-23 Share holding pattern (Jun-23) LIABILITIES Capital 423 424 Reserves & surplus 21,083 21,952 Deposits 2,13,386 2,22,496 Borrowings 19,319 21,178 31% 33% Other liabilities & provisions 6,131 8,146 TOTAL 2,60,342 2,74,196 ASSETS Cash & balance
Slide 30: Financials
Financials ₹ in Cr Q1 FY23 Q4 FY23 Q1 FY24 Q-o-Q Y-o-Y Interest income 3,629 4,721 5,025 6% 38% Interest expenses 2,024 2,811 3,106 10% 53% Net interest income 1,605 1,910 1,919 0.5% 20% Other income 453 734 732 -0.2% 62% Operating expense 1,085 1,309 1,349 3% 24% Total income 4,082 5,455 5,757 6% 4
Slide 31: Key Indicators
Key Indicators Q1 FY23 Q2 FY23 Q3 FY23 Q4 FY23 Q1 FY24 Book Value 91.59 93.00 96.74 101.22 105.04 (Per Share in ₹) Shareholder value EPS 11.46 13.26 15.09 17.30 16.22 (annualized) CASA + Deposits <= ₹2cr Granularity (% of Total Deposits) 92% 92% 88% 84% 82% ROA % 1.10 1.21 1.33 1.45 1.30 Profitabili
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 Q4 FY23 Q1 FY24 Book Value 496 Business NPA NPA 36 Gross NPA 407 406 444 436 4 Retail 1,181 1,366 42 398 Agri 977 977 2 58 101 375 6 BuB 936 988 5 81 CV/CE 30 34 107 70 91 CoB 666 679 7 9
Slide 33: Group companies
Group companies Fedbank Financial Services Subsidiary Federal Operations & Services (FedServ) Subsidiary 73.2% 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 34: Corporate governance & ESG snapshot
Corporate governance & ESG snapshot Strong & Diverse 10 70% Total Board Independent Strong Board & Diverse Board Members Directors Women Women Focus on Gender 41% 20% Representation Representation diversity in workforce in the Board Investor Recognition Employee Recognition Governance Structure ESG
Slide 35: Public Commitments
ESG performance snapshot Reducing coal related Finance women Public Commitments sub project exposure Grow green portfolio In-house solar power Water conservation entrepreneurs Bank branches to be Gender diversity ratio (Baseline March 2021: size generation capacity capacity (Baseline March 2023: gre
Slide 36: Award-winning franchise & other initiatives / highlights
Award-winning franchise & other initiatives / highlights BYOM Top up Home Loans - 2023 India’s Best Workplaces in BFSI - 2023 Finnoviti Awards Great Place to Work Institute, India Best use of Direct Marketing in a Loyalty Program - 2023 The Economic Times Future Ready Organisation for 2023-24 16th e
Slide 37: 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 37
Slide 38: Thank You
Thank You 38