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FEDERAL BANK: Key takeaways
Outlook on slippages improving. Slippages in retail and SME portfolio has been
consistently reducing for the past three quarters and would witness further improvement
as the policies implemented in recent months is taking shape. Further, hub and spoke
model is gradually being accepted by the entire organization.
Marginal shift in strategy on NIM. Risk adjusted margins would get a lot more focus.
Business model built with margins at 3.9-4% levels. The bank is building business in 6 key
regions: Kerala, TN, Punjab, Gujarat, Southern Maharashtra and Karnataka.
Fee income growth to show strong improvement in FY2012 albeit on a very low base.
Hence the contribution to overall revenues would remain low.
The bank would invest in increasing training hours to attune employees to cross sell fee
based products. The bank is looking for lateral recruitment in risk, corporate and treasury
products. No major hiring expected as a part of the agreement. ESOPs have been
approved by the shareholders.
RoEs to touch 15% in FY2012 as focus shifts towards balance sheet growth from
managing asset quality. The bank is adequately capitalized for near-term growth.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
FEDERAL BANK: Key takeaways
Outlook on slippages improving. Slippages in retail and SME portfolio has been
consistently reducing for the past three quarters and would witness further improvement
as the policies implemented in recent months is taking shape. Further, hub and spoke
model is gradually being accepted by the entire organization.
Marginal shift in strategy on NIM. Risk adjusted margins would get a lot more focus.
Business model built with margins at 3.9-4% levels. The bank is building business in 6 key
regions: Kerala, TN, Punjab, Gujarat, Southern Maharashtra and Karnataka.
Fee income growth to show strong improvement in FY2012 albeit on a very low base.
Hence the contribution to overall revenues would remain low.
The bank would invest in increasing training hours to attune employees to cross sell fee
based products. The bank is looking for lateral recruitment in risk, corporate and treasury
products. No major hiring expected as a part of the agreement. ESOPs have been
approved by the shareholders.
RoEs to touch 15% in FY2012 as focus shifts towards balance sheet growth from
managing asset quality. The bank is adequately capitalized for near-term growth.
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