Federal Bank - Gold Loans Witnessing Robust Traction; Business Granularity Improving: Motilal Oswal
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Motilal Oswal Report
In its FY21 Annual Report, Federal Bank Ltd. highlighted the progress it is making in strengthening the balance sheet and the focus it is laying on building its gold loans portfolio, along with the newly launched credit card product.
Higher focus is placed on leveraging its distribution base through the RM model, which will enable further improvement in the cost/income ratio.
The bank remains focused on granular lending, led by retail/small and medium enterprise segment, within which gold loans witnessed robust traction (up 70% YoY).
Retail mix has now improved to 33% versus 27% in FY18.
Liability franchise continues to remain robust and granular, with the concentration of top 20 deposits declining to 4.8%.
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