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Why did FEDERAL BANK LTD. share price move today?collapse benzinga

Why did FEDERAL BANK LTD. share price move today?

Federal Bank shares are trading higher after stock expert Manas Jayaswal issued a Buy call with a target price of ₹129 and a stop loss at ₹123.5. Source: CNBC Awaaz

86% Buy 👍
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Shareholding Info
  • Foreign institutions-FII
    26.94 %
  • Other domestic institutions
    9.79 %
  • Retail and other
    29.28 %
  • Mutual Funds
    33.99 %

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Company Overview


With headquarters in Aluva, Kochi, Kerala, Federal Bank Limited is a private commercial bank in India. It was founded in 1931. Federal Bank was previously known as Travancore Federal Bank. There are about 1,336 branches of this bank, located throughout India.

Federal Bank is currently the biggest traditional private-sector bank in the country. More than 110 banks and exchange companies worldwide are part of the bank's remittance agreements. Additionally, Federal Bank maintains representative offices in Kuwait, Dubai, Qatar, Abu Dhabi and Oman.

The bank has a Capital Adequacy Ratio (CAR) of 17.23%, one of the highest in the sector. Federal Bank is one of the largest banks in India, in terms of their capital base.

Company Journey


Federal Bank has had numerous significant turning points in their journey. The following are recent milestones that have defined Federal Bank's journey:
  • 2016
    • The Unified Payments Interface (UPI) application 'Lotza' from Federal Bank is released.
    • Lotza provides safe financial transaction capabilities between accounts of multiple banks through a single app.
    • The app is developed on the idea of 'Accounts of different Banks on one App.'
  • 2018
    • Bharat QR services are first made available to retailers by Federal Bank.
  • 2019
    • With a growth of 20.21% in overall business, the bank maintains its steady performance.
    • As of 31 March 2019, the bank was still going strong with 1669 ATMs, 1251 branches and 269 cash recyclers.
  • 2020
    • The bank reached the landmark of its overall business, crossing ₹2.5 lakh crore, going ₹2,74,558 crore with a rise of 12%.
  • 2022
    • Federal Bank officially goes live as an issuer in e-RUPI, which is a digital payment solution from the National Payment Corporation of India (NPCI).
    • e-RUPI is designed to be both cashless and contactless for specific people and purposes.
    • Beneficiaries may receive e-RUPI coupons by SMS or QR code.

Business Highlights


The bank runs its business through four divisions: treasury operations, wholesale banking, retail banking and other banking operations. Investment and trading in stocks, bonds and other securities are included in the treasury activities.

Products and services offered by the bank include working capital term financing, specialised corporate financing, trade financing, foreign exchange syndicate services, product-structured financing and electronic banking needs.

The bank currently employs over 12,000 people.

The following are the different categories that the bank's services fall under:

Personal Banking


The bank offers a wide selection of banking services and products. These include savings accounts, deposits, ATM services, personal loans, telebanking services, insurance, real-time gross settlement (RTGS), etc.

NRI Banking


Through all of its branches, the bank provides a comprehensive range of NRI services. Non-Resident Indians (NRI) have access to NRE and NRO accounts in Indian Rupees, among other services.

SME–Business Banking


The bank provides customised current account products and parameterised loans for each SME sector.

Corporate Banking


To satisfy the unique needs of corporate, institutional, and business clients, the bank provides customised structured products.

Performance highlights


  • As of late 2022, Federal Bank has a market capitalisation of ₹28,496 crore.
  • The 2019-2022 Federal Bank’s stock price CAGR (compound annual growth rate) has been recorded at 16%.
  • Over the same time period, from 2019 to 2022, the compounded profit growth was down 15%.
  • Financing profit for Federal Bank increased from ₹352 crore in the FY (fiscal year) 2019 to ₹664 crore in the FY ending in March 2022.
  • Federal Bank made a net profit of ₹1,996 crore in the FY 2022 as opposed to ₹1,680 crore in 2021.
  • Federal Bank's compounded sales growth from 2019 to 2022 was reported to be 7%. For the same duration, Federal Bank's stock price return has been 59.43%.
  • Federal Bank is included in the following important indices, among others:
    • Nifty 500
    • NIFTY Midcap 100
    • Nifty Midcap 50
    • Nifty 200
    • Nifty Bank
  • FII (Foreign Institutional Investors) have increased holdings from 26.20% to 26.39% in September 2022 quarter.
  • Mutual Funds have increased holdings from 32.64% to 34.78% in the September 2022 quarter.
  • The company's EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortisation) for the fiscal year 2022 was ₹10,235 crore.
  • For the fiscal year that ended in March 2022, Federal Bank had an ROE (Return On Equity) of 10.83% and a ROCE (Return On Capital Expenditure) of 9.77%.
  • Federal Bank’s share price returns for 2019-2022 stand at 52.7%.

Management


The current members of Federal Bank's executive management are:
  • Chairman: C. Balagopal
  • CEO: Shyam Srinivasan
  • CFO: Venkatraman Venkateswaran

Investor Relations Contact:


Company Secretary and Compliance Officer
Secretarial Department
The Federal Bank Limited

Address:
Corporate Office
Federal Towers
Alwaye 683 101

Phone: 0484-2634061 / 0484-2622263
Email: secretarial@federalbank.co.in

Industry Overview


Some of the top competitors of Federal Bank are listed below, along with their respective market capitalisations:
  • HDFC Bank: ₹ 9,02,413 crore
  • ICICI Bank: ₹ 6,41,306 crore
  • Kotak Mahindra Bank: ₹ 3,87,392 crore
  • Axis Bank: ₹ 2,64,016 crore
  • IndusInd Bank: ₹ 88,913 crore
There are 22 private sector banks in the Indian financial system. Private sector banks are financial institutions where private investors, instead of the Indian government, hold larger ownership or value interest.

Bank assets across all banking sectors grew in 2020–2022. In 2022, the total assets of the banking system (public and private sector banks combined) rose to ₹1,59,400 crore. Private banking assets as a whole were worth ₹92,500 crore in 2022.

Risks and concerns


Problems with the Infrastructure


One of the biggest issues with the private banking sector in India is a need for more relevant and enough physical and IT (internet technology) infrastructure.

Perception Difficulties


In the Indian context, banks are seen as product pushers and sellers, rather than as portfolio managers or financial advisors.

HR (Human Resource) Difficulties


Talent is always in limited supply due to a need for qualified private bankers and high turnover rates.

Regulatory Difficulties


Indian regulators are still ill-prepared to handle the types of products and services that private banking provides.

Challenges of Scale


Due to a lack of sufficient assets under management or sufficient clientele, not all Indian banks have been able to expand their private banking activities (AUM: assets under management).

Registrar


Integrated Registry Management Services Private Limited,

Address: 2nd Floor, Kences Towers,
No.1, Ramakrishna Street,
Off: North Usman Road, T.Nagar,
Chennai- 600 017.

Phone: 044-28140801-03
Fax: 044-28142479
Email: csdstd@integratedindia.in
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