Federal Bank in the limelight

Federal Bank is doing well today, up currently over 2% at Rs.93.15 and this is after having hit an intra day high at Rs.95.80. Volumes are up almost 2 times. The stock today went tantalizingly close to its 52-week high of Rs.99.90.

The stock is up in the green after the RBI stated that FIIs could own up to 74%, up from the earlier lomit of 49% in the stock. RBI said that it has been removed from the ban list and the restrictions placed on the purchase of shares have been withdrawn with immediate effect .

The Bank posted excellent Q3FY14 results. This Kerala headquartered NRI-focused bank with 1,142 branches and 1,312 ATMs, has not only repeated its superb Q2 performance in terms of profitability, but has sharply improved asset quality during the three month ended 31^st December 2013. While Q3 total income and net interest income is flat QoQ to Rs. 1,896 crore and Rs. 546 crore, the net profit is up 1.8% QoQ to Rs. 230 crore, from Rs. 226 crore in Q2. NIM is strong at 3.24%, thanks to a CASA ratio of 30.35% and also, retail deposits (NRI franchise) accounting for about 93% of the total deposits of Rs. 57,700 crore. RoA maintained at 1.31% during Q3.

Asset quality has improved sharply – Gross NPAs which stood at Rs. 1,554 crore (3.44%) on 31^st March 2013 and Rs. 1,466 crore (3.39%) on 30^th September 2013, is down to Rs. 1,200 crore (2.83%) on 31^st December 2013. Net NPAs have also moderated from Rs. 432 crore (0.98%) on 31^st March 2013 and Rs. 411 crore (0.98%) on 30^th September 2013, is down to Rs. 356 crore (0.86%) on 31^st December 2013.