Federal Bank Q2 Review - Credit Growth, Asset Quality Improves: IDBI Capital
Federal Bank Q2 Review - Credit Growth, Asset Quality Improves: IDBI Capital
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IDBI Capital Report
Federal Bank Ltd. reported rise in Covid specific restructured assets to 2.5% vs 1.8% QoQ led by retail loans (specifically home loans).
However, asset quality improved as Gross non-performing assets stood at 3.24% vs 3.5% QoQ led by higher recoveries and upgrades (Rs 4.2 billion) as compared to slippages (Rs 3 billion).
Stressed book percentage of assets, which was declining for last 3 years, spiked to 2.62% vs 2.24% QoQ. Credit growth improved to 10% YoY vs 7% YoY (Q1FY22); deposits growth stood at 10% YoY vs 9% YoY (Q2FY22).
We have moved to FY24E estimates and maintained 'Buy' rating with the new target price of Rs 123 (earlier 102) based on P/BV of 1.2x FY24.
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