Federal Bank Third Quarter Review – is in a new normal, reiterates as key top pick: Yes Securities

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It should be noted that the annualized slippage ratio of Federal Bank Ltd. of 1.3% is the best among our hedging banks that have published reports so far, including HDFC Bank Ltd. at 1.6%.

The net slip, in all cases, is in the negative zone. Although the restructured pound at 259 basis points of advances looks optically a bit higher than some large private sector peers, it is a relatively safe pound. 98% of this portfolio comes from secured lending, mostly from low-loss-given-default segments for Federal Bank.

The collection efficiency of this book is 96%, the same as that of the whole bank.

Management said the Federal Bank can develop a key set of high-yield segments in credit cards, personal loans, microfinance and commercial vehicle loans of Rs 75 billion in about two years.

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