Preview of Federal Bank; Q2FY12 Results Banking Sector Oct 2011 ::Way2Wealth

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􀂙 W h lh fi h f 30% f h b k d NIM i l bl
Federal Bank
We expect healthy profit growth of ~yoy for the bank and to remain more or less stable
in this quarter.
􀂙 We expect healthy loan growth in the bank and expect it to be higher than industry average.
􀂙 We expect an improvement on q‐o‐q profits too as business will improve from what was seen in
Q1FY12 where in the bank had 45 days of ‘no‐work’ in its important branches in Kerala on account
of employees & union tiff.
􀂙 We expect the asset quality to remain more or less on the stable side. But we are concerned with
the restructured accounts since in the first half of FY12, CDR has been on a rise in the industry &
with FBL being a corporate segment focused bank, we might see a rise in restructured portfolio in
this quarter.
􀂙 We expect the return ratios to remain on the healthier side.
􀂙 Currently, the stock is available at a P/ABV of ~1.1x FY13E.