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Federal Bank Q2 Review - Credit Growth, Asset Quality Improves: IDBI Capital

Federal Bank Q2 Review - Credit Growth, Asset Quality Improves: IDBI Capital

<div class="paragraphs"><p>Federal Bank, Vashi branch in Maharashtra. (Source: BloombergQuint) &nbsp;</p></div>
Federal Bank, Vashi branch in Maharashtra. (Source: BloombergQuint)  

BQ Blue’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BloombergQuint’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.

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.

Click on the attachment to read the full report:

IDBI Capital Fedral Bank Q2 Results Review.pdf

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