Tag Federal Bank

Chennai 27th September 2024: Federal Bank is excited to announce the launch of NPS Vatsalya, a pioneering initiative under the National Pension System (NPS) specifically for minors. Launched by the Government of India on September 18, 2024, NPS Vatsalya aims to provide a secure and flexible retirement planning solution for children, ensuring long-term wealth accumulation through the power of compounding. With a minimum annual contribution of just Rs. 1,000, this scheme is accessible to families from all economic backgrounds, promoting financial inclusion and early financial planning.

“NPS Vatsalya is a significant step towards securing the financial future of our children. By starting early, we can ensure that they have a robust financial foundation,” said P V Joy, SVP & Country Head – Deposits, Wealth & Bancassurance of Federal Bank. “We are glad to bring this initiative to the citizens of the country, as it is launched by the Government to promote long-term financial planning and security for all.”

NPS Vatsalya offers flexible investment options, allowing guardians to choose between active and auto investment choices across various asset classes. Managed by reputable fund managers registered with the Pension Fund Regulatory and Development Authority (PFRDA), the scheme ensures expert handling of investments. Additionally, subscribers can benefit from tax deductions under Section 80 CCD (1) and Section 80 CCD (1B) of the Income Tax Act, making it a tax-efficient investment option. For more information, visit Federal Bank’s NPS page.

How to Apply: Interested individuals can apply for NPS Vatsalya by visiting any of the designated Federal Bank branches or through the Bank’s online platform. Upon application, subscribers will receive a unique Permanent Retirement Account Number (PRAN) for all future transactions.

Chennai, 24.07.24: Federal Bank announced the Financial Results for the quarter ended 30th June 2024. The key highlights of the results on a Y-o-Y basis are as follows:

• Total Business of the Bank reached Rs. 486871.33 Cr
•  Net Profit highest ever @ Rs.1009.53 Cr, grew 18.25 %
•  Operating Profit highest ever @ Rs. 1500.91 Cr
•  ROA for Q1 stood at 1.27 % and ROE stood at 13.64 %
•  GNPA and NNPA brought down to 2.11% and 0.60 % respectively.
•  Total Deposits increased by 19.58 %
•  Total Net Advances increased by 20.34 %
•  Net Interest Income at ₹ 2291.98 Cr, grew by 19.46 %

Mr. Shyam Srinivasan, Managing Director and CEO of the Bank said, “I am encouraged that we have had a resoundingly strong start to FY 25 and delivered our highest ever quarterly profits. With an Industry leading growth in both deposits and assets we are gaining share consistently. Our overall focus of dialing up our physical and digital presence is helping us reach a larger footprint across India. It’s been a quarter where we recorded many firsts, however most noteworthy was the fact that our pioneering technology initiatives have been awarded by very reputed stakeholders. We believe the good start; stable credit quality and sustainable retail deposit traction should help us move further towards our aspiration of being the Most Admired Bank.”

Strong Growth – Resilient Balance Sheet Performance

Total Business of the Bank reached Rs. 486871.33 Cr registering a growth of 19.92 % as on 30th June 2024.

Total Deposits increased from Rs. 222495.50 Cr as on 30th June 2023 to Rs.266064.69 Cr as on 30th June 2024.

On the Asset side, Net advances increased from Rs 183487.41 Cr as on 30th June 2023 to Rs. 220806.64 Cr on 30th June 2024. Retail Advances grew by 19.75 % to reach Rs.70020.08 Cr. Business Banking advances grew by 20.45 % to reach Rs.18159.34 Cr. Commercial Banking grew by 23.71 % to Rs.22687 Cr. Corporate Advances registered a growth of 12.20 % to reach Rs.76588.62 Cr. The CV/ CE advances grew by 51.73 % to reach Rs 3728 Cr.

Highest Ever Operating Profit and Net Profit

The Bank registered Operating Profit of Rs.1500.91 Cr and Net Profit of Rs.1009.53 Cr for the quarter ended 30th June 2024. Operating profit recorded a growth of 15.25 % on a year-on-year basis.

Remarkable Income Parameters

Net Interest Income grew 19.46 % from Rs. 1918.59 Cr to Rs.2291.98 Cr as on 30th June 2024. Total income of the Bank grew 25.87 % to reach Rs.7246.06 Cr. Earnings per share (EPS) annualized is Rs 16.60.

Key Ratios

ROA & ROE of the Bank for the quarter stood at 1.27 % and 13.64 % respectively.

Robust Asset Quality

Gross NPA of the Bank as at the end of Q1 FY25 stood at Rs. 4738.35 Cr, which as a percentage to Gross Advances stood at 2.11 %. The Net NPA and Net NPA as a percentage to Net Advances as on 30th June 2024 stood at Rs. 1330.44 Cr and 0.60% respectively. Provision Coverage Ratio excluding Technical Write Off was 70.79 %.

Net Worth & Capital Adequacy

Net worth of the Bank increased from Rs. 22247.75 Cr to Rs.30300.84 Cr, as on 30th June 2024. Capital Adequacy Ratio (CRAR) of the Bank, computed as per Basel III guidelines stood at 15.57 % as at the end of the quarter.

Footprint

The Bank has 1518 banking outlets and 2041 ATMs and Cash Recyclers as on 30th June 2024.

Growing Brand Salience

An expanding distribution footprint across physical and digital assets is backed by amped up initiatives to increase the visibility for the brand. There is an active increase in salience across segments and geographies being pursued by Federal Bank.

Market Outlook ~ Key Positives

Strong GDP growth India maintains a world leading GDP growth rate.

Deleveraged Corporate Balance Sheets: Indian corporates have significantly reduced their leverage, and the banking sector is well-capitalized.

US Tightening Cycle Nearing End: This could trigger Foreign Institutional Investor (FII) buying in India, as they have been underweight due to the rising dollar and US interest rates, causing redemptions in their Emerging Market funds.

Stable Political Mandate: This ensures fiscal prudence and hopefully a stable tax regime.

Above-Average Monsoon: Expected in July, which will positively impact rural-centric businesses.

Moderate Inflation Inflation in India is relatively moderate compared to other countries

Our Budget Expectations

 Fiscal deficit and borrowing programme will continue to be same i.e 5.1% fiscal deficit as mentioned in Interim budget.

-> The deficit will be managed prudently with assumption of 11% nominal GDP growth and resultant growth in GST and Income tax collection plus RBI cheque of Rs 2.11 lac crores will further provide cushion on fiscal front.

-> Infrastructure will continue to be the focus are so capex driven growth will continue mainly led by Housing, Defence, Railways, Renewable, Power, Energy Transition, Rural Infrastructure like power, water and roads for everyone will continue.

-> Focus on manufacturing to create jobs in sectors like Garments, textiles and electronic manufacturing.

-> We are of the view disinvestment target will be kept realistic but sincere efforts will be made to monetize in this stock market rally through OFS in PSUs at right prices and right time and strategic sales in PSUs like SCI or Concor will be undertaken in coming few quarters.

-> In order to make this happen logically they will not change the current capital gain tax structure although either in budget or outside budget some changes to reduce speculation in future and option market will be taken which might cause some volume drop in markets. However, we believe that this will not change intrinsic values of any business apart from capital market linked stocks.

-> Some increase in Kisan Nidhi allocation where they are giving Rs 6,000 to farmers can come but that will not upset fiscal maths.

-> Strong focus on affordable housing and building – 3 crores pakka houses by increasing subsidy for affordable housing will be done.

-> Some increase in disposable income of middle class by increase in tax limit is possible so that consumption can get some boost.

Companies set to benefit due to this (Our budget picks)

1) Larsen & Tourbo (CMP 3636 , target 4400)
2) Ambuja Cement (CMP 685, Target 800)
3) Jyothy Labs (CMP 493,Target 575)

These are budget specific themes but we continue to like IT stocks like Infosys due to free cash flow generating nature of business and likely bottoming of IT spending as Interest rates have clearly peaked due to inflation cooling off in US.

Comfortable CD ratio banks like ICICI, Federal Bank, City Union Bank, SBI, and DCB where they can grow at higher then their deposits and PEG wise or ROA/Price to Book or ROE/Price to book ratios are attractive, although the peak margins and growth in banking are behind us.

6th February 2024, Chennai:  Federal Bank becomes one of the earliest private sector banks to launch NCMC integrated Debit cards. National Common Mobility Card (NCMC) is a feature introduced on RuPay Contactless Debit Card which allows cardholders to make payments across NCMC-enabled terminals at metro stations, buses, etc in an offline mode within fraction of second, just by tapping the card on the card reader. NCMC is equipped with multiple functions, including stored value payments (currently up to Rs.2000/- and subject to change as prescribed by RBI from time to time) to simplify travel across different modes by digitizing payment.

 For activating the NCMC functionality and to start using the card for offline transactions, the cardholder is required to enable “contactless feature” either through Mobile banking, Internet banking or through IVR. Post enablement, visit the customer care desk of Metro station and initiate the activation and money load transaction. Money can be loaded in the card through cash or through the existing savings account at the metro counter itself. After loading money, the customer can just tap the card at the entry and exit of the terminal and unveil the convenience of travelling without purchasing a ticket separately. The amount debited/available will be displayed on the metro terminal screen at the time of tapping the card.

  ‘We are thrilled to unveil a new and ambitious project for Federal Bank RuPay Debit Card holders who can now use their debit cards for offline payments at transit operators. The NCMC is poised to revolutionize the way citizens navigate urban transportation networks across the country. With the goal of enhancing convenience and efficiency, the NCMC introduces a unified approach to travel, simplifying the commuting experience for millions. We feel that this step taken by Federal Bank and RuPay would empower the ustomers and give them the flexibility to travel and pay on the go’- said Chitrabhanu KG, SVP and Country Head- Retail Assets and cards- Federal Bank.