Federal Bank - Exceeding Expectations In Q3: Dolat Capital
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Dolat Capital Report
Federal Bank Ltd. reported strong net interest income growth of 24% YoY on the back of declining cost of funds, aided by to 9 basis points sequential improvement in net interest margin to 3.2%.
Strong traction in core fee lines aided pre-provision operating profit growth of 29% YoY despite higher employee costs.
Pro-forma slippages at Rs 8.3 billion or 2.7% (annualised) during Q3 FY21 were contained. We do not expect FY21E slippages to exceed that of previous year at 1.75%.
Pro forma gross non-performing asset increased by 30 basis points QoQ to 3.38%, with marginal write-offs during the quarter.
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