Federal Bank is rated a buy with a target price of Rs. 56 per share. Key points:
- The bank has faced elevated NPA levels recently but its share price may have overreacted, now at an oversold level with reasonable risk/return.
- Management is focusing on growth through digital initiatives, corporate lending, and branch optimization.
- NPA levels spiked in the first quarter of 2016 but have shown signs of retreating since. The SME segment has the highest NPA levels.
- Loan growth has been robust in SME and retail segments. Corporate loans declined recently but efforts are being made to stimulate growth.
- Deposits have grown steadily, with strong growth from the NRI segment
Banking Sector Q4FY15 preview: Asset quality will remain under pressureIndiaNotes.com
- Loan growth for state-owned banks is expected to be moderate at 10-11% YoY due to weak corporate demand and capital conservation efforts, while private banks may see higher growth of 18-20% due to strong retail loans.
- Asset quality is likely to remain under pressure with high slippages of 2.4% and increased restructuring as the RBI forbearance period ends. Stress additions will be a key factor for state-owned bank earnings.
- Net interest margins are expected to be stable for most banks, while treasury gains from falling bond yields and provision reversals may support earnings. However, retail fees growth and high operating expenses will impact state-owned bank profits.
- The
- Yes Bank is an Indian private sector bank that has grown to become the 4th largest private bank in India. It has over 600 branches with a focus in Northern and Western India.
- The document recommends Yes Bank as a strong buy due to its strong financials, shift towards a retail-led strategy that will boost profit margins, and potential interest rate cuts that will support loan growth.
- Yes Bank has successfully increased its lower-cost current and savings account deposits while maintaining strong asset quality and profitability. It is poised for further growth as it expands its retail presence.
SBI Dynamic Bond Fund : Debt Mutual Fund - Apr 2016SBI Mutual Fund
SBI Dynamic Bond Fund is a fund investing in G-sec, corporate bond and money market instruments. This Dynamic Bond Fund Scheme is best suited for investors seeking investment in Debt, Money Market, Corporate Bonds, Government Securities etc. Find more details about this Debt Fund on https://www.sbimf.com/Products/DebtSchemes/SBI_Dynamic_Bond_Fund.aspx . You can even invest in Mutual Funds online on SBI Mutual Funds.
The RBI cut interest rates slightly but not as much as expected. Inflation is cooling off. The RBI expects slower growth than the government. In Europe, interest rates were cut to boost the slowing economy. Indian and multinational company earnings were mixed. Auto sales declined unexpectedly.
SBI Corporate Bond Fund : Debt Mutual Fund - Apr 2016SBI Mutual Fund
This three sentence summary provides the key details about the SBI Corporate Bond Fund:
The SBI Corporate Bond Fund seeks to generate returns through investments in high quality corporate debt securities ranging from 80-100% of its portfolio, while maintaining up to 20% in low-to-medium risk money market instruments. The fund aims to offer reasonable returns to investors with a medium-term investment horizon and low risk appetite by actively managing a portfolio of corporate bonds and maintaining average credit quality of AA or higher. The fund manager aims to generate alpha through prudent credit selection and maintaining an average portfolio maturity of under 3 years.
IMS Investment Management Services provides financial services including investing in Nepal's capital market through its websites. This report analyzes the financial performance of commercial banks in Nepal during the second quarter of fiscal year 2070/71. It finds that the banking sector's net profit increased 18.33% compared to the same period last year due to higher interest income and increased lending. Nabil Bank had the highest profit growth while some banks like KIST saw declining profits. Total bank deposits increased 20.96% as excess liquidity in the market made it easier for banks to attract deposits.
The document discusses recent measures by the Reserve Bank of India (RBI) to develop the corporate bond market in India. Key points:
- RBI announced measures including allowing corporate bonds in liquidity operations, higher ceilings on credit enhancements, and direct access for foreign investors to bond platforms.
- These measures address some supply-side issues but more work is needed on the demand side to develop participation from long-term institutional investors across credit ratings.
- For the bond market to be truly vibrant, depth across credit ratings is needed along with liquidity, creditor protection, and low information asymmetry. The measures are a step forward but full development remains a work in progress.
The document provides an equity market outlook and summaries of domestic and global macroeconomic news. It notes that the global economy is stable with commodities bouncing back. In India, it expects the RBI to cut rates and for monsoons and discretionary spending to influence the market rally. Internationally, it mentions Eurozone recovery continuing slowly, China's trade deficit narrowing, and US rate hikes potentially accelerating economic growth. Market indices and commodity prices are also summarized.
Banking Sector Q4FY15 preview: Asset quality will remain under pressureIndiaNotes.com
- Loan growth for state-owned banks is expected to be moderate at 10-11% YoY due to weak corporate demand and capital conservation efforts, while private banks may see higher growth of 18-20% due to strong retail loans.
- Asset quality is likely to remain under pressure with high slippages of 2.4% and increased restructuring as the RBI forbearance period ends. Stress additions will be a key factor for state-owned bank earnings.
- Net interest margins are expected to be stable for most banks, while treasury gains from falling bond yields and provision reversals may support earnings. However, retail fees growth and high operating expenses will impact state-owned bank profits.
- The
- Yes Bank is an Indian private sector bank that has grown to become the 4th largest private bank in India. It has over 600 branches with a focus in Northern and Western India.
- The document recommends Yes Bank as a strong buy due to its strong financials, shift towards a retail-led strategy that will boost profit margins, and potential interest rate cuts that will support loan growth.
- Yes Bank has successfully increased its lower-cost current and savings account deposits while maintaining strong asset quality and profitability. It is poised for further growth as it expands its retail presence.
SBI Dynamic Bond Fund : Debt Mutual Fund - Apr 2016SBI Mutual Fund
SBI Dynamic Bond Fund is a fund investing in G-sec, corporate bond and money market instruments. This Dynamic Bond Fund Scheme is best suited for investors seeking investment in Debt, Money Market, Corporate Bonds, Government Securities etc. Find more details about this Debt Fund on https://www.sbimf.com/Products/DebtSchemes/SBI_Dynamic_Bond_Fund.aspx . You can even invest in Mutual Funds online on SBI Mutual Funds.
The RBI cut interest rates slightly but not as much as expected. Inflation is cooling off. The RBI expects slower growth than the government. In Europe, interest rates were cut to boost the slowing economy. Indian and multinational company earnings were mixed. Auto sales declined unexpectedly.
SBI Corporate Bond Fund : Debt Mutual Fund - Apr 2016SBI Mutual Fund
This three sentence summary provides the key details about the SBI Corporate Bond Fund:
The SBI Corporate Bond Fund seeks to generate returns through investments in high quality corporate debt securities ranging from 80-100% of its portfolio, while maintaining up to 20% in low-to-medium risk money market instruments. The fund aims to offer reasonable returns to investors with a medium-term investment horizon and low risk appetite by actively managing a portfolio of corporate bonds and maintaining average credit quality of AA or higher. The fund manager aims to generate alpha through prudent credit selection and maintaining an average portfolio maturity of under 3 years.
IMS Investment Management Services provides financial services including investing in Nepal's capital market through its websites. This report analyzes the financial performance of commercial banks in Nepal during the second quarter of fiscal year 2070/71. It finds that the banking sector's net profit increased 18.33% compared to the same period last year due to higher interest income and increased lending. Nabil Bank had the highest profit growth while some banks like KIST saw declining profits. Total bank deposits increased 20.96% as excess liquidity in the market made it easier for banks to attract deposits.
The document discusses recent measures by the Reserve Bank of India (RBI) to develop the corporate bond market in India. Key points:
- RBI announced measures including allowing corporate bonds in liquidity operations, higher ceilings on credit enhancements, and direct access for foreign investors to bond platforms.
- These measures address some supply-side issues but more work is needed on the demand side to develop participation from long-term institutional investors across credit ratings.
- For the bond market to be truly vibrant, depth across credit ratings is needed along with liquidity, creditor protection, and low information asymmetry. The measures are a step forward but full development remains a work in progress.
The document provides an equity market outlook and summaries of domestic and global macroeconomic news. It notes that the global economy is stable with commodities bouncing back. In India, it expects the RBI to cut rates and for monsoons and discretionary spending to influence the market rally. Internationally, it mentions Eurozone recovery continuing slowly, China's trade deficit narrowing, and US rate hikes potentially accelerating economic growth. Market indices and commodity prices are also summarized.
This weekly summary discusses the Indian and global macroeconomic environment and equity markets. Some key points:
- The Indian equity market has risen over 11% since the February 2016 budget on positive domestic macros and foreign institutional investment inflows of over Rs. 25,000 crores.
- The upcoming RBI monetary policy decision and start of corporate earnings season will be important influences on the market this week.
- Chinese and Indian manufacturing PMIs showed expansion in March, suggesting easing pressure on those economies.
- Most Indian indices rose over 1% for the week on strong demand, with midcap and technology indices performing well.
The document summarizes key points from a meeting with India's Ministry of Finance on developments in the banking sector and upcoming reforms. It notes that the government remains committed to adequately capitalizing public sector banks and that bank performance evaluations will increasingly emphasize qualitative productivity parameters over growth. Recommendations to improve employee productivity at public sector banks are also being considered. The document expresses that these steps are moving in the right direction if properly executed.
Burning Desires is a community organization (Non-Profit Making Platform) to promote investors' awareness and eradicating herding behavior while investing. Uploaded is the IPO Outlook on RBL Bank Limited with Burning Desires Committee Recommendation.
The CII – IBA Financial Conditions Index at 61.1 for Q1 FY 2016-17 shows healthy improvement in the overall financial conditions in the Indian economy vis-à-vis the previous quarter (47.8) reflecting from strong expectations of leading banks and financial institutions of reduction in cost of funds, comfortable liquidity position and better external financial linkages whereas the overall economic activity also signaling improvement, albeit moderately on a quarter on quarter basis.
- The equity markets in India gained 1.5% last week as private sector banks reported good quarterly results, with HDFC Bank reporting over 30% profit growth for the 21st consecutive quarter.
- This week, Hindustan Unilever is expected to report soft numbers with only 5-6% volume growth, while many companies face pressure on margins from increased royalty payments.
- The RBI is expected to cut its repo rate by 25 basis points this week to further ease monetary policy, with some predicting a larger 50 basis point cut.
Global equity markets regained stability and gained over the week as positive economic data from Europe eased investor concerns. In Asia, markets were mixed with Japan, Hong Kong, and South Korea declining while China gained. In Europe, good earnings and economic data boosted stocks despite declines in some countries. US stocks rose as soft economic data eased rate hike fears. In India, markets gained on improved global sentiment despite some sectors declining, while bond yields fell and the rupee strengthened.
The RBI announced its first bi-monthly monetary policy statement for 2016-17. It reduced the repo rate by 25 basis points to 6.5% and the CRR requirement for banks from 95% to 90%. The overall monetary policy stance remains accommodative with the goal of better transmission of interest rates and reducing liquidity deficit. The RBI expects CPI inflation to remain around 5% for FY17 and does not see inflation as a threat currently.
The Reserve Bank of India cut its repo rate by 25 basis points to 6.5% while keeping the CRR unchanged at 4%. Inflation is expected to be around 4.5% by March 2018. The results season has begun and expectations are modest. Revivals are possible in the auto and financial sectors along with rural and agriculture sectors based on pay commission awards and monsoon. Commodity prices declined over the week except for crude oil and the US dollar. Bond yields fell across maturities except the 10-year bond.
This document provides an overview of various macroeconomic indicators that can impact stock prices, including inflation rates, interest rates, purchasing managers' indexes, index of industrial production, foreign investment, currency rates, and more. It discusses how changes in these economic factors can affect businesses and consumer behavior, influencing stock market performance. Sample data is presented for several Indian macroeconomic indicators from 2012 to 2014, such as declining CPI and WPI inflation, interest rates, and purchasing manager index readings for services and manufacturing.
The Indian equity market rallied 0.60% last week due to gains in global markets and a strengthening currency. Since the budget, Indian indices have risen over 11%, reflecting belief that interest rates will be cut by 25 basis points. Lower inflation supports expectations of rate cuts. The government will borrow 59% of its annual plan in the next six months. European banks made progress in Greek debt talks, while Deutsche Borse and the LSE agreed to a $30 billion merger.
fundamental analysis for axis bank in banking industryswapnilgangele
The document discusses various aspects of the banking industry in India including economic features, liquidity controls, demand for credit, barriers to entry, and the impact of the global financial crisis in 2008-2009. It provides data on key metrics for foreign and nationalized banks over several quarters from 2007-2008 to 2008-2009 showing growth in areas like deposits, advances, and capital despite challenges from higher NPAs and debt restructuring. The conclusion notes upcoming issues and challenges for Indian banks around risk management, consolidation, technology, reforms, and skilled manpower.
The Indian rupee’s recent roller-coaster ride has impacted virtually every section of society. It has hit the country’s finances, eroded investor confidence, pushed down stock indices, pumped up fuel prices and, in turn, those of essentials.
The rupee’s slide is symptomatic of the concerns about the India story. Months of policy paralysis, political churn and social standoffs have taken their toll. It is in this backdrop that senior journalist Subhomoy Bhattacharjee analyses the prospects of the rupee in the cover story of the August edition of PAR, MSLGROUP India’s public affairs newsletter.
Another senior journalist, Kandula Subramaniam, puts into perspective the power crisis the country is up against and the dilemma state electricity companies are facing.
Additionally, you'll also find an analysis of India's bold food security law as well as an update of important policy announcements and reviews in this issue.
The document provides an overview of the global and Indian economic and market conditions for the week of April 11-15, 2016. Some of the key points covered include:
- The Indian equity markets continued their positive momentum in the previous week and month of April, outperforming most global markets.
- India's industrial growth turned positive in February and retail inflation declined, providing room for further interest rate cuts.
- Large IT and private banks reported positive quarterly earnings, and the overall Q4 earnings season is expected to be good.
- The IMF projected India's growth at 7.5% for this year and next, and a forecast of normal monsoon rains is positive for the economy.
Axis Bank Q1FY15: NIMs largely stable; BuyIndiaNotes.com
In Q1FY15, Axis posted NII of Rs 3310.5 cr, up 15.5% yoy and 4.6% qoq. NIMs have been stable at 3.88%. Growth in loans was sustained at 16.3% with momentum in the retail advances keeping up. Fee income growth was muted. Buy at CMP and add on dips.
Perform EIC Analysis of Banking Sector and HDFC bank khushbu chauhan
This document provides an analysis of the banking sector and HDFC Bank through fundamental analysis. It begins with an overview of fundamental analysis and its three steps: economy analysis, industry analysis, and company analysis. The economy analysis covers economic variables, growth rates, and government policies that are positive for banking. The industry analysis finds that banking is in the expansion stage, exhibiting strong growth and profitability. The company analysis shows that HDFC Bank has stronger financial metrics than competitors like ICICI Bank, making it a good investment. Key metrics like NAV, market value, and performance over time are presented to compare HDFC Bank favorably.
This document provides an analysis of HDFC Bank from a macroeconomic and fundamental perspective. It begins with an introduction and scope before analyzing the macroeconomic outlook in India, including economic growth projections, inflation rates, and issues concerning the banking industry. Part 1 discusses the international linkages of the Indian economy and analyzes factors like GDP growth, industrial growth, and inflation projections. It notes the banking industry will be affected by macroeconomic changes. Part 2 examines the banking industry in India, including the role of public and private sector banks and the path forward for the industry. The document aims to comprehensively analyze HDFC Bank within the contexts of the macroeconomic environment and banking industry in India.
The document discusses India's monetary and banking reforms post-liberalization. It outlines the objectives of monetary policy in India including price stability, economic growth, full employment, and balance of payments equilibrium. It then describes the evolution of monetary policy frameworks and tools used, including key interest rates, cash reserve ratios, statutory liquidity ratios, and open market operations. Banking reforms introduced prudential norms, capital adequacy norms, and interest rate deregulation to increase efficiency and competitiveness in the banking sector. Overall, the reforms aimed to increase stability, reduce inflation, and boost economic growth.
TCS reported inline quarterly results with revenues growing 1.5% sequentially led by volume growth of 1.8%. The company maintained its guidance of 18% revenue growth in dollar terms for FY14. Margins were stable at 31.4% for EBITDA and 29.8% for EBIT, in line with management's expectations of 26-28% margins. The analyst maintains a 'Buy' rating and increases the target price to Rs. 2510 citing strong fundamentals and robust demand environment.
This document discusses the Reserve Bank of India's (RBI) role in conducting monetary policy and operations in India. The RBI uses various monetary policy instruments to control money supply, interest rates, credit availability, and price stability. These instruments include open market operations, cash reserve ratios, statutory liquidity ratios, credit ceilings, bank rate policy, credit authorization schemes, moral suasion, and repo and reverse repo rates. The goal is to stabilize prices by regulating inflation and maintain a healthy balance of payments, economic growth, and financial system stability.
Este documento resume una investigación sobre las consecuencias de la reforma en telecomunicaciones en México para las familias y televisoras. Explica que la reforma tuvo como objetivo principal beneficiar a los ciudadanos mexicanos al mejorar el acceso a servicios digitales a precios más bajos. Sin embargo, algunos argumentan que también permitirá mayor vigilancia gubernamental. La reforma podría beneficiar a las familias con servicios más baratos y de mejor calidad, pero perjudicar económicamente a las grandes televisoras como Televisa y TV Azte
ATS-16: Streets of Agreement: The Path to Multimodal ArterialsBTAOregon
The Portland and Eugene regions are transforming road space into places that make communities more livable, while balancing the interests of multiple stakeholders.
Presenters:
Anthony Buczek
Tom Schwetz
Rob Inerfeld
Terra Lingley
Luke Pelz
Ben Baldwin
Zef Wagner
Nick Falbo
This weekly summary discusses the Indian and global macroeconomic environment and equity markets. Some key points:
- The Indian equity market has risen over 11% since the February 2016 budget on positive domestic macros and foreign institutional investment inflows of over Rs. 25,000 crores.
- The upcoming RBI monetary policy decision and start of corporate earnings season will be important influences on the market this week.
- Chinese and Indian manufacturing PMIs showed expansion in March, suggesting easing pressure on those economies.
- Most Indian indices rose over 1% for the week on strong demand, with midcap and technology indices performing well.
The document summarizes key points from a meeting with India's Ministry of Finance on developments in the banking sector and upcoming reforms. It notes that the government remains committed to adequately capitalizing public sector banks and that bank performance evaluations will increasingly emphasize qualitative productivity parameters over growth. Recommendations to improve employee productivity at public sector banks are also being considered. The document expresses that these steps are moving in the right direction if properly executed.
Burning Desires is a community organization (Non-Profit Making Platform) to promote investors' awareness and eradicating herding behavior while investing. Uploaded is the IPO Outlook on RBL Bank Limited with Burning Desires Committee Recommendation.
The CII – IBA Financial Conditions Index at 61.1 for Q1 FY 2016-17 shows healthy improvement in the overall financial conditions in the Indian economy vis-à-vis the previous quarter (47.8) reflecting from strong expectations of leading banks and financial institutions of reduction in cost of funds, comfortable liquidity position and better external financial linkages whereas the overall economic activity also signaling improvement, albeit moderately on a quarter on quarter basis.
- The equity markets in India gained 1.5% last week as private sector banks reported good quarterly results, with HDFC Bank reporting over 30% profit growth for the 21st consecutive quarter.
- This week, Hindustan Unilever is expected to report soft numbers with only 5-6% volume growth, while many companies face pressure on margins from increased royalty payments.
- The RBI is expected to cut its repo rate by 25 basis points this week to further ease monetary policy, with some predicting a larger 50 basis point cut.
Global equity markets regained stability and gained over the week as positive economic data from Europe eased investor concerns. In Asia, markets were mixed with Japan, Hong Kong, and South Korea declining while China gained. In Europe, good earnings and economic data boosted stocks despite declines in some countries. US stocks rose as soft economic data eased rate hike fears. In India, markets gained on improved global sentiment despite some sectors declining, while bond yields fell and the rupee strengthened.
The RBI announced its first bi-monthly monetary policy statement for 2016-17. It reduced the repo rate by 25 basis points to 6.5% and the CRR requirement for banks from 95% to 90%. The overall monetary policy stance remains accommodative with the goal of better transmission of interest rates and reducing liquidity deficit. The RBI expects CPI inflation to remain around 5% for FY17 and does not see inflation as a threat currently.
The Reserve Bank of India cut its repo rate by 25 basis points to 6.5% while keeping the CRR unchanged at 4%. Inflation is expected to be around 4.5% by March 2018. The results season has begun and expectations are modest. Revivals are possible in the auto and financial sectors along with rural and agriculture sectors based on pay commission awards and monsoon. Commodity prices declined over the week except for crude oil and the US dollar. Bond yields fell across maturities except the 10-year bond.
This document provides an overview of various macroeconomic indicators that can impact stock prices, including inflation rates, interest rates, purchasing managers' indexes, index of industrial production, foreign investment, currency rates, and more. It discusses how changes in these economic factors can affect businesses and consumer behavior, influencing stock market performance. Sample data is presented for several Indian macroeconomic indicators from 2012 to 2014, such as declining CPI and WPI inflation, interest rates, and purchasing manager index readings for services and manufacturing.
The Indian equity market rallied 0.60% last week due to gains in global markets and a strengthening currency. Since the budget, Indian indices have risen over 11%, reflecting belief that interest rates will be cut by 25 basis points. Lower inflation supports expectations of rate cuts. The government will borrow 59% of its annual plan in the next six months. European banks made progress in Greek debt talks, while Deutsche Borse and the LSE agreed to a $30 billion merger.
fundamental analysis for axis bank in banking industryswapnilgangele
The document discusses various aspects of the banking industry in India including economic features, liquidity controls, demand for credit, barriers to entry, and the impact of the global financial crisis in 2008-2009. It provides data on key metrics for foreign and nationalized banks over several quarters from 2007-2008 to 2008-2009 showing growth in areas like deposits, advances, and capital despite challenges from higher NPAs and debt restructuring. The conclusion notes upcoming issues and challenges for Indian banks around risk management, consolidation, technology, reforms, and skilled manpower.
The Indian rupee’s recent roller-coaster ride has impacted virtually every section of society. It has hit the country’s finances, eroded investor confidence, pushed down stock indices, pumped up fuel prices and, in turn, those of essentials.
The rupee’s slide is symptomatic of the concerns about the India story. Months of policy paralysis, political churn and social standoffs have taken their toll. It is in this backdrop that senior journalist Subhomoy Bhattacharjee analyses the prospects of the rupee in the cover story of the August edition of PAR, MSLGROUP India’s public affairs newsletter.
Another senior journalist, Kandula Subramaniam, puts into perspective the power crisis the country is up against and the dilemma state electricity companies are facing.
Additionally, you'll also find an analysis of India's bold food security law as well as an update of important policy announcements and reviews in this issue.
The document provides an overview of the global and Indian economic and market conditions for the week of April 11-15, 2016. Some of the key points covered include:
- The Indian equity markets continued their positive momentum in the previous week and month of April, outperforming most global markets.
- India's industrial growth turned positive in February and retail inflation declined, providing room for further interest rate cuts.
- Large IT and private banks reported positive quarterly earnings, and the overall Q4 earnings season is expected to be good.
- The IMF projected India's growth at 7.5% for this year and next, and a forecast of normal monsoon rains is positive for the economy.
Axis Bank Q1FY15: NIMs largely stable; BuyIndiaNotes.com
In Q1FY15, Axis posted NII of Rs 3310.5 cr, up 15.5% yoy and 4.6% qoq. NIMs have been stable at 3.88%. Growth in loans was sustained at 16.3% with momentum in the retail advances keeping up. Fee income growth was muted. Buy at CMP and add on dips.
Perform EIC Analysis of Banking Sector and HDFC bank khushbu chauhan
This document provides an analysis of the banking sector and HDFC Bank through fundamental analysis. It begins with an overview of fundamental analysis and its three steps: economy analysis, industry analysis, and company analysis. The economy analysis covers economic variables, growth rates, and government policies that are positive for banking. The industry analysis finds that banking is in the expansion stage, exhibiting strong growth and profitability. The company analysis shows that HDFC Bank has stronger financial metrics than competitors like ICICI Bank, making it a good investment. Key metrics like NAV, market value, and performance over time are presented to compare HDFC Bank favorably.
This document provides an analysis of HDFC Bank from a macroeconomic and fundamental perspective. It begins with an introduction and scope before analyzing the macroeconomic outlook in India, including economic growth projections, inflation rates, and issues concerning the banking industry. Part 1 discusses the international linkages of the Indian economy and analyzes factors like GDP growth, industrial growth, and inflation projections. It notes the banking industry will be affected by macroeconomic changes. Part 2 examines the banking industry in India, including the role of public and private sector banks and the path forward for the industry. The document aims to comprehensively analyze HDFC Bank within the contexts of the macroeconomic environment and banking industry in India.
The document discusses India's monetary and banking reforms post-liberalization. It outlines the objectives of monetary policy in India including price stability, economic growth, full employment, and balance of payments equilibrium. It then describes the evolution of monetary policy frameworks and tools used, including key interest rates, cash reserve ratios, statutory liquidity ratios, and open market operations. Banking reforms introduced prudential norms, capital adequacy norms, and interest rate deregulation to increase efficiency and competitiveness in the banking sector. Overall, the reforms aimed to increase stability, reduce inflation, and boost economic growth.
TCS reported inline quarterly results with revenues growing 1.5% sequentially led by volume growth of 1.8%. The company maintained its guidance of 18% revenue growth in dollar terms for FY14. Margins were stable at 31.4% for EBITDA and 29.8% for EBIT, in line with management's expectations of 26-28% margins. The analyst maintains a 'Buy' rating and increases the target price to Rs. 2510 citing strong fundamentals and robust demand environment.
This document discusses the Reserve Bank of India's (RBI) role in conducting monetary policy and operations in India. The RBI uses various monetary policy instruments to control money supply, interest rates, credit availability, and price stability. These instruments include open market operations, cash reserve ratios, statutory liquidity ratios, credit ceilings, bank rate policy, credit authorization schemes, moral suasion, and repo and reverse repo rates. The goal is to stabilize prices by regulating inflation and maintain a healthy balance of payments, economic growth, and financial system stability.
Este documento resume una investigación sobre las consecuencias de la reforma en telecomunicaciones en México para las familias y televisoras. Explica que la reforma tuvo como objetivo principal beneficiar a los ciudadanos mexicanos al mejorar el acceso a servicios digitales a precios más bajos. Sin embargo, algunos argumentan que también permitirá mayor vigilancia gubernamental. La reforma podría beneficiar a las familias con servicios más baratos y de mejor calidad, pero perjudicar económicamente a las grandes televisoras como Televisa y TV Azte
ATS-16: Streets of Agreement: The Path to Multimodal ArterialsBTAOregon
The Portland and Eugene regions are transforming road space into places that make communities more livable, while balancing the interests of multiple stakeholders.
Presenters:
Anthony Buczek
Tom Schwetz
Rob Inerfeld
Terra Lingley
Luke Pelz
Ben Baldwin
Zef Wagner
Nick Falbo
El documento habla sobre la ansiedad y cómo está relacionada con nuestra forma de pensar en el pasado y el futuro. Explica que la ansiedad proviene de comparaciones y percepciones de amenazas temporales que nos hacen sentir inquietud por lo que pasó o preocupación por lo que vendrá. También menciona que vivir en el presente es la única forma de encontrar calma, ya que ni el pasado ni el futuro están bajo nuestro control.
La empresa se dedica al diseño gráfico y ofrece soluciones creativas e innovadoras a bajo costo y en tiempo oportuno. Su misión es proveer herramientas gráficas y web de alta calidad para ampliar el mercado de sus clientes. Su visión es ser reconocida a nivel nacional e internacional por la calidad de sus productos y servicios tecnológicamente avanzados. Ofrece una amplia gama de servicios de diseño gráfico, publicitario y editorial para satisfacer las necesidades de cada cliente.
Había una oveja llamada María que le gustaba jugar sola porque sus compañeras la molestaban. Mientras jugaba a atrapar mariposas, se distrajo y se perdió. Sus compañeras notaron que María no había regresado a casa y fueron a buscarla. Después de varios días, lograron encontrar a María herida y la llevaron con un médico para que se recuperara.
El documento habla sobre la importancia de valorar la vida y disfrutarla hasta el final, cumpliendo metas y sueños como formar una familia y tener hijos a quienes dejarles un buen futuro. También enfatiza en cuidar el planeta para que las futuras generaciones también puedan disfrutar de él.
Este documento proporciona información sobre un estudiante de la Escuela Superior de Agricultura del Valle del Fuerte. Incluye el nombre del estudiante, Peña Ruiz Angel Jaziel, el nombre del profesor, Ing. Luna Leal Enrique, el turno vespertino y el grupo 109.
Investigadores del departamento de termodinámica de la facultad de ingeniería...Aartuuroo Aartuuroo
Investigadores de la Universidad Nacional del Nordeste y la Universidad Tecnológica Nacional General Pacheco
probaron con éxito generar energía a partir de las heces caninas mediante un proceso de biodigestión que las
convierte en metano y dióxido de carbono, los cuales pueden usarse para calefacción, cocción y generación
eléctrica. La prueba produjo 55,58 gramos de biogás por cada kilo de heces caninas. El estudio se realizó en la
ciudad de Buenos Aires debido a su alta dens
El documento describe la historia de un labrador que siempre era feliz y mantenía una actitud positiva incluso cuando enfrentaba dificultades como la pérdida de su cosecha o la destrucción de su casa por un incendio. Luego explica que gran parte del sufrimiento humano proviene del deseo de que las cosas sean diferentes a como son en realidad, y describe cuatro etapas por las que la gente suele pasar al negar la realidad: incredulidad, enojo, nostalgia y tristeza. Finalmente, enfatiza la importancia de acept
Russell Banta is a highly qualified electrical engineer with over 15 years of experience in various engineering roles. He has a bachelor's degree in electrical and electronic engineering from University College Cork and has worked in roles such as IT support specialist, data center engineer, graduate engineer, and assistant engineer. He has strong organizational, teamwork, and communication skills. He is proficient in programming languages, Microsoft Office, and engineering software such as MATLAB. He is seeking a new engineering position that allows him to utilize his skills and experience.
Fervil Von is an Inbound Marketing Manager from the Philippines with over 3 years of experience in SEO consulting. He currently works at The Bitesize Concepts on strategies to grow website traffic. Previously he has held SEO roles at companies like Accredited Online Training, 1st Paging, and InsureDirect.com. Fervil runs his own website FervilVon.com where he helps businesses grow online through SEO and internet marketing. He is skilled in SEO, SEM, SMM and has scored in the top 10% on search engine optimization tests.
El documento describe los diferentes métodos de control de costes y presupuestos según el tipo de contrato utilizado, incluyendo contratos por unidades de obra, contratos de precio fijo y contratos por administración. También describe cómo José Jiménez Benito ha creado herramientas como hojas de cálculo en Excel y bases de datos en Presto para realizar un seguimiento efectivo de los costes en cada tipo de contrato. Además, explica cómo utiliza programas de planificación como Microsoft Project para controlar los costes de unidades que dependen del tiempo en contratos por administra
Human resource courses hr courses - short coursesBoni Bard
This human resource short course provides students with the skills and knowledge required for an entry-level career in human resources. The course is composed of four units that aim to provide essential HR skills such as assisting with recruitment, performance management, industrial relations, and reviewing HR policies and procedures. Upon successful completion of the units, students receive a statement of attainment and credit toward a Certificate IV in Human Resources. The online, self-paced format allows students flexibility to complete the 165 hour course within 6 months.
El Proyecto Prometeo Mejía es una iniciativa del Rector del Colegio Nacional Mejía para fomentar la excelencia académica y el interés por la ciencia entre los estudiantes. Comenzó en 2012 con un grupo de 8 estudiantes que desarrollan material didáctico y conocimiento científico para transmitir la ciencia a sus compañeros de manera accesible. El objetivo es traducir el conocimiento inalcanzable a un lenguaje cotidiano para incentivar el estudio de la ciencia.
La ética estudia cómo las acciones afectan el bien y el mal, y quién se beneficia o perjudica por dichas acciones. La ética en las organizaciones puede verse afectada por factores como los valores de los líderes, la cultura organizacional y la estructura de la empresa. Más recientemente, la ética en los negocios ha sido objeto de revisión debido a los dilemas éticos que plantea. Unir la ética y el marketing, aunque complejo, es importante para guiar los procesos de una manera transparente y comprometida con la respons
Este documento lista varios sistemas operativos populares y sus lenguajes de programación asociados. Algunos de los sistemas operativos mencionados incluyen Android (programado en C), Mac OS (Objective-C), Linux (C, C++ y Python), Windows (Assembler, C y C++) y sus lenguajes de programación respectivos.
2016 Ennea MLB - Life, Love & LeadershipEileen Darwin
This document provides information about an Enneagram workshop being held in Melbourne, Australia on November 19-20, 2016. It discusses the Enneagram model and how it can provide insights into personality types, relationships, and leadership. Testimonials from past attendees indicate they gained a better understanding of themselves and others through the workshop. The document also provides biographies of the workshop leaders, Eileen Darwin and Mark Klaassen, and details about their experience teaching the Enneagram. A calendar of upcoming Enneagram and NLP training events led by Mark Klaassen is included at the end.
The document summarizes key concerns and outlook for banks in Indonesia based on meetings with banks and companies during a recent trip to Indonesia. The top three concerns expressed by banks are: 1) currency volatility due to the rupiah's large depreciation, 2) increasing regulatory intervention, and 3) potential delays in government spending if the tax revenue target is missed. Large banks are expected to see slowing earnings growth while smaller banks should see a recovery as margins improve and credit costs stabilize. Among smaller banks, BTPN is the preferred pick.
Narnolia Securities Limited positive to buy stocks of Jyothy Lab, ICICI BANK, Crompton Greaves Ltd and BANK OF INDIA with target price of Rs 1846,Rs 130, Rs 1094 and Rs 260. respectively
Increasing NPA In PSU Banks And Its Management Amit Sharma
The document discusses non-performing assets (NPAs) in the Indian banking system. It defines NPAs and different categories of assets based on payment delays. It notes that rising NPAs have increased banks' provisioning costs and reduced their profitability. High NPAs also constrain banks' ability to lend, potentially slowing economic growth. The document outlines some of the negative impacts of NPAs on banks and the financial system as a whole. It concludes by discussing some steps that can be taken to prevent and manage NPAs.
The document summarizes the rising levels of non-performing assets (NPAs) in the Indian banking system since 2011. It notes that NPAs have increased sharply for public sector banks, accounting for over 85% of total NPAs by 2015. The build-up is attributed to an economic slowdown, declining industrial growth, and concentrated exposure to stressed sectors like infrastructure and small and medium enterprises. The document analyzes NPA data in detail and outlines potential measures to reduce NPAs, including more stringent credit appraisal, monitoring of large loans, and utilizing the bankruptcy code.
The document compares financial performance indicators between Punjab National Bank (PNB) and HDFC Bank over a 5-year period from 2017 to 2021. It analyzes growth in key metrics such as net profit, net assets, return on assets (ROA), and non-performing assets (NPA). The summary shows that HDFC Bank outperformed PNB on most measures, with higher ROA, positive net profit growth, and lower NPA ratios compared to PNB's negative net profit growth and higher NPA ratios.
Union Bank is trading at attractive valuation of 0.4 times one year forward book and 4.2 times one year forward earnings. The bank is expected to see margin expansion due to RBI keeping policy rates unchanged and softening bond yields, which will result in portfolio gains for the bank. The bank has also taken deposits through FCNR accounts which have lower costs. While asset quality was stable sequentially, restructured loans pipeline is still high. The analyst values Union Bank at Rs. 163 per share based on 0.5 times forward book and 5 times forward earnings.
A STUDY OF NON-PERFORMING ASSETS AND ITS IMPACT ON BANKING SECTORJournal For Research
Banks plays an important role in the economic development of a country. Banks are growth-driver and the banking business is exposed to various risk, such as credit risk, liquidity risk, interest risk, market risk, operational risk and management risk. Apart from these risks the very important risk is loan recovery. The sound financial position of a bank depends upon the recovery of loans or its level of Non-performing assets (NPAs). Reduced NPAs generally gives the impression that banks have strengthened their credit appraisal processes over the years and growth in NPAs involves the necessity of provisions, which bring down the overall profitability of banks. The Indian banking sector is facing a serious problem of NPA. The magnitude of NPA is comparatively higher in public sectors banks. To improve the efficiency and profitability of banks the NPA need to be reduced and controlled.
At the CMP of Rs 33, the stock is trading at an Adj P/BV of 1.3x and 1.1x for FY15E and FY16E, respectively. With the new government stepping-up reforms and making efforts to remove the bottlenecks in the economy, we expect the economic growth to pick up going forward. Consequently, we expect the strong growth momentum seen in SIB over past few years to continue. We expect advances and deposits to grow at a CAGR of ~19% each over the forecasted period of FY14-16E.
With business further expected to grow at CAGR of 19.5% over FY14-16E; NIMs remaining stable at ~3.0% and cost-to-income ratio improving to ~45% (currently ~50%), we expect a robust PAT growth of 22.6% CAGR over FY14-16E to Rs 763 crore.
Asset quality of SIB has improved in FY14 with GNPA and Net NPA standing at 1.2% and 0.8% in FY14 against 1.4% and 0.8% in FY13, respectively (which compares favourably with peers).
On the capital adequacy front, SIB is comfortably placed to support the future business needs of the bank over the period FY14-16E. The management has stated that it does not require any Tier-I capital funding during the current year. However, it plans to raise Tier-II capital of Rs 200 crore in FY15 to fund future growth.
The document provides an overview and outlook on domestic and global financial markets. It discusses the CEO's positive outlook on the Indian equity market rally and fiscal reforms. On the domestic front, it summarizes inflation trends, industrial growth, bond yields, and provides recommendations on debt strategies. Globally, it reviews equity market performance and updates on major economies. The overall document aims to advise investors by analyzing economic and market conditions.
IndusInd Bank continues to demonstrate strong growth in both its consumer finance and corporate finance segments. Management expects medium-term loan growth to be 25-30% and for consumer finance to remain around 50% of the total loan book. The bank's commercial vehicle loans, which make up around 24% of its total portfolio, have seen strong growth and stable asset quality despite sector slowdown. Asset quality across the consumer finance segment has exhibited an improving trend. The bank has also increased its focus on new products like loan against property, which is showing better than expected growth. The report upgrades the bank's FY14 EPS estimate by 8% on expectations of higher margins from recent capital raising and an improving CASA ratio.
Narnolia Securities Limited natural view on the KPIT stock could be change after favorable update on stock and healthy earning guidance for FY15E. At a CMP of Rs 151, stock trades at 9x FY15E EPS. Also today buy UCO bank stock due to net profit growth of 207% YoY
- Monetary policy aims to control money supply, contain inflation, stabilize exchange rates, and maintain balance of payments equilibrium. This helps support macroeconomic stability.
- Pakistan's economy grew reasonably well in recent years, with GDP growth reaching 4.04% in FY2015 and 4.71% in FY2016, despite slower global growth and economic challenges. Private sector credit expansion has helped manufacturing and industry.
- Broad money supply (M2) increased 6.93% during the period as net domestic assets grew. However, net foreign assets only saw modest growth as scheduled bank foreign assets declined slightly while SBP foreign assets grew.
Karur Vysya Bank is a privately held Indian bank, headquartered in Karur in Tamil Nadu. The company operates in four business segments: treasury operations, corporate/ wholesale banking operations, retail banking operations and other banking operations. The company's investments are categorized into three categories, held to maturity, held for trading and available for sale. Karur Vysya Bank
Q4FY14 Result: Bajaj Finance continues to reap the benefits of healthy consum...IndiaNotes.com
Bajaj Finance (BAF) reported a 11% year-over-year increase in 4QFY14 profit at INR1.82 billion, which was below estimates due to a decline in net interest margins from shifting loan mix to lower-yielding mortgages and higher operating expenses from ongoing investments in new business lines. Asset quality remained healthy with non-performing assets stable at 1.18% despite a corporate loan slippage. The report maintains a "Buy" rating with a target price of INR2,018, but reduces FY15/16 earnings estimates by 5-6% to factor lower margins and higher costs from the loan mix shift and investments.
- The Pradhan Mantri Krishi Sinchai Yojana (PMKSY) scheme will invest INR500 billion over 5 years to improve irrigation infrastructure like water sheds and drip irrigation systems.
- Jain Irrigation's managing director believes this will strongly benefit their micro irrigation systems (MIS) and piping businesses, potentially doubling drip irrigation sales over 5 years.
- For fiscal year 2016, Jain Irrigation forecasts 10-15% revenue growth in its domestic MIS business and aims to reduce gross receivable days in this segment to 130 days from currently 188 days.
Bajaj Finance Q1FY15: Net profit jumps to Rs2113.60 mn, up 20.27%; BuyIndiaNotes.com
During Q1FY14, Bajaj Finance's net profit jumps to Rs. 2113.60 million from Rs. 1757.40 million over the corresponding quarter last year, registered a growth of 20.27% y-o-y. Investors are recommended to buy the stock for a price target of Rs.2385.00.
Interbank call money rates found itself below the Reserve Bank of India (RBI)’s repo rate of 6.00% for most parts of the month as systemic liquidity remained comfortable amid periodic repo auctions conducted by the RBI. However, intermittent tightness in call rates was seen on fund demand from banks to meet their mandatory reserve requirements. Meanwhile, the apex bank sporadically offered banks the opportunity to park funds through some reverse repo auctions. Read the full document to know more.
IE Essay to answer Question H. What do you believe are the greatest challenges facing the sector or industry you would like to specialize in at IE? What role do you hope to be able to play in this sector or industry in the medium term?
1. EQUITIES –INDIA
Analyst: Sumeesh Thomas
Stock Rating : BUY
Federal Bank Ltd
30 th Mar 2016
Business Description:
Federal Bank is an India based bank having active
presence in the entire spectrum of banking services.
Its core strength lies in its SME loan business and
huge base among NRIs located in Middle East.
Moreover, being a growth oriented bank, it has
spanned its activities beyond normal banking
operations and has engraved its solid foot print in
forex trading and third party financial product
distribution.
Has the current share price absorbed all
negativities which Federal Bank has faced in the
recent past?
As everybody knows, the key yardstick pertaining to
bank’s financial performance is the NPA (Non-
Performing Asset) trend. The price movement of
banking stock greatly hinges on hearing news about
newer developments on NPA front. As far as Federal
Bank is concerned, the elevated NPA position for the
last 3 consecutive quarters has hammered down the
stock price to a level which has not been seen in the
last 2 years. It is a fact that a couple of global factors
influenced the price movement in general, but we
cannot underestimate the glory which the investors
have attached to Non-Performing Asset data points.
As per our assessment, investors have overreacted to
the news concerning worsening asset quality of
Federal Bank without making an attempt to analyze
the favourable financial and non-financial factors such
as robust loan growth, comfortable level of capital
adequacy ratio at around 15 % and strong top
management team etc. It appears that the situation
has caused the share price to reach an oversold region
which indicates fresh buying opportunities. From
fundamental perspective, risk return profile and
valuation look reasonable currently.
CMP : Rs 46.90
Target Price: RS 56
Time Horizon: 12 Months
Shareholding Pattern (Sep-2015)
Promoter 1.83
FII 13.72
DII 30.75
Others 53,70
Stock Data
CMP (30/03/2011) 46.90
NSE Code FEDERALBNK
BSE Code 500469
Bloomberg Code FB
Reuters Code FED.NS
52 Week High 79.80
52 Week Low 41.35
Market Cap (In crore) 8577.26
Face Value 2
DPS 2.20
PE Multiple 11.50
2. Federal Bank Ltd
Mar 2016
Management’s reorientation towards growth:
Management has turned its attention on making the top management formidable in order to
equip them to deal with fast changing banking business environment. Federal Bank had some
recent high profile head count additions towards this end.
Acknowledging the significance of digitalisation, bank has converged major chunk of its efforts
towards rolling out new facilities to render enhanced banking experience for the tech-savvy
customers.
Management has identified that the era of aggressive branch expansion has come to an end and
the banks needs to generate more return in terms of increased productivity from the existing
branches and through branch optimisation efforts by means of relocation of less productive
braches to a different place.
Hitherto, the bank had not mined aggressively big ticket corporate loan market. Ever since the
management recognized the faster pace of corporate loan growth as pillar of banking business
uptick, it has taken steps to achieve this. Federal Bank can now boast of a network of relationship
managers across different geographies to cater to this loan segment.
Bank’s Loan Mix:
Bank maintains an excellent portfolio of loan with emphasis on its traditional stronghold SME
business . Below chart depicts the weightage of each loan vertical relative to its overall business
16392
13876
6137
15272
Loan mix as on Sep '16‘ (Amount in Crores)
Retail
SME
Agri
Corporate
3. Mar 2016
Federal Bank Ltd
Corporate loan segment registered a de-growth of 5 % in 2016 Q2 YOY. In order to address this issue,
there has been a renewed focus and conscious efforts on the part of top management to stimulate
growth by building a team relationship managers who will deal with pipe line and converts.
Acknowledging this as a positive development, we expect a strong credit off take in the next 2 to 3
quarters. As regards SME advances, Federal Bank has witnessed a growth rate of 17 % during the last
2 quarters. This is a very encouraging trend . Management is hopeful that the same will be sustained in
the next few quarters as well. The two factors which may turn in favour of loan growth as a whole will
be the continued low interest rate regime and the expected spending boost consequent to the
implementation of 7 th Central Pay Commission.
NPA movement:
Since Gross & Net NPA and Provision Coverage ratio data were observed to have some degree of
correlation, we have drawn up a comparison chart to gauge the growth trend of these 3 key
parameters during the last 5 quarters. As per the below chart, it is obvious that Gross and Net NPA
have spiked in the first quarter of FY 2016. Hence, since the bank which had already built up a
comfortable PCR during low interest period, it began using the provision coverage as a tool to stem the
huge erosion in net profit. The encouraging facet of the NPA trend is that the spike which was
witnessed during 2016 Q1 has not accelerated further, instead it began showing the sign of retreat
-10%
0%
10%
20%
30%
40%
2015 Q3 2015 Q4 2016 Q1 2016 Q2 2016 Q3
Gross NPAs (%)
Net NPAs (%)
Provision Coverage Ratio
0
0.5
1
1.5
2
2.5
3
3.5
2015 Q3 2015 Q4 2016 Q1 2016 Q2 2016 Q3
Gross NPAs (%)
Net NPAs (%)
4. Federal Bank Ltd- Fundamental Report
PCR diagram indicates that the bank
maintained the highest PCR to the
tune of 85 % during the period of low
NPA and started scaling down the
provision coverage as and when the
asset quality is getting worse. PCR is
hovering around the border of 70 % in
the latest available quarter.
60
65
70
75
80
85
90
2015
Q3
2015
Q4
2016
Q1
2016
Q2
2016
Q3
Provision Coverage Ratio
Provision Coverage
Ratio
0.00
0.50
1.00
1.50
2.00
2.50
3.00
3.50
4.00
4.50
5.00
Retail SME Agri Corporate
Segment wise Gross NPA as on Sep ‘2015’
Segment wise NPA
SME segment topped in the NPA
Category scoring 4.3 % level.
Corporate segment is not far behind
with a 3.58 % score on NPA front.
Out of slippage of Rs. 405 Crores
recorded in 2016 Q2, Large
corporate and SME have contributed
Rs. 170 Crores and 155 Crores of
NPAs respectively. During Q3 FY
2016, three NPA accounts were sold
to ARCs (Asset Reconstruction
Company) . The amounts were Rs.
225, Rs. 109 and Rs. 70 (all in Crores).
It is related to one shipping and 2
metal accounts.
Loan restructuring
Loan restructuring is an essential part of banking operation. Banks resort to loan restructuring as part of 5/25
or Corporate Debt Restructuring (CDR) schemes . It entails easing original terms and conditions of loan like
extending repayment period or reduction in interest rate etc. Major sectors covered are Infrastructure, Power
and Metal. Most of the NPA origination is linked to restructured category for most of the bank . Federal Bank is
also no exception.
While publishing quarterly results, analysts in general are eager to know the amount of fresh restructuring
occurred during the quarter. As regards Federal Bank, it is heartening to note that the fresh rescheduled
category of loan amount came to just 80 Lacks during the past 6 months However, there are a three accounts
for which moratorium on restructuring will be ending in the next 3 quarters. It is a cause of concern for the
bank. As on September 30th last year, bank’s standard restructured loan amount was Rs. 2200 Crores. SEBs
(State Electricity Boards) have 37 % exposure in Standard Restructured loan while Infrastructure and Airline
also had substantial contribution towards loan restructuring exercise.
5. Federal Bank- Fundamental Report
Deposit Profile:
Large chunk of deposits from NRI segment is the differentiating factor for Federal Bank. It appears that NRI
deposit growth reached at its peak to the tune of 27 % during the bygone quarter. However the bank is
cautiously optimistic over the sustained high deposit flow in this segment due to the impending recessionary
fears in the Middle East Countries as a result of crude oil price crash.
29.5
30
30.5
31
31.5
32
32.5
2015 Q3 2015 Q4 2016 Q1 2016 Q2 2016 Q3
CASA (%) growth
CASA (%)
With regard to CASA proportion to overall
deposit, it is registering a steady and
sturdy pace of growth as depicted in the
chart.
Operational Efficiency:
Cost to Income ratio is the one of the main indicators of operational efficiency of the bank. There is a direct
relationship between NPA and Cost to Income Ratio. During the periods of rising NPA, cost to income proportion
will generally shoot up for banks, thanks to non-recognition of income from NPA accounts. In the below chart,
it is obvious that between Annual result of FY 2015 and 2016 Q1 quarterly result, cost to income ratio zoomed
in by around 7 %. On the expenditure side, we can see that era of branch expansion is over and the bank
currently focuses on extracting more productivity from the existing braches, hence we do not see a dramatic rise
in operational expenditure in terms of incremental man power and branch maintenance expenditure Hence
NPA largely accounts for the spike in the ratio. Based on this hypothesis, we have drawn another Cost to Income
ratio projection chart (in next slide)
0%
2%
4%
6%
8%
10%
12%
14%
2012 2013 2014 2015 2016 Q1 2016 Q2
Cost to Income growth (in %)
Cost to Income
6. Federal Bank Ltd – Fundamental Report
We hope that the bank will come
clean most of its NPA woes by FY
2017E. In such a situation, we project
that cost to income ratio will come
down significantly.
0
20
40
60
2015 2016E 2017E 2018E
Projected Cost to Income Ratio
Cost to Income
Non-Interest Income:
Regarding its non-interest income, Forex trading business was impacted due to slow down in Middle
East. However GIFT city initiatives and growth on retail loan front, have boosted fees income. Hence,
we scaled down our expectations on non-interest income and estimated some degree of de-growth in
FY 2016E.Hnowever we forecast that the growth momentum will be restored in full scale in FY 2017E
aided by fee income and third party financial product distribution.
Profitability:
Bank’s bottom line growth depends on the growth in advances, non-interest income and level of NPA.
Spike in NPA witnessed during the first quarter of the Current Financial Year has impacted the interest
income and necessitated higher provisioning, leading to lower profit.NPA level has remained sticky
during the successive 2 quarters as well. In view of these facts, we estimated that in FY 2016, Federal
Bank will register dip in net profit after witnessing a CAGR growth of 17.40 % over the last 5 years.
We are optimistic that bottom line growth will be revived in FY 2017E, buoyed by impressive uptick in
corporate , SME and housing loan growth. We also hope that bank’s NPA overhang will be turned
around by then.
0
500
1000
1500
2000
2011 2012 2013 2014 2015 2016 E 2017 E 2018 E
Projected Net Profit Growth in Crores
Net Profit
7. Federal Bank Ltd- Fundamental Report
0
1
2
3
4
2011 2012 2013 2014 2015 2016E 2017E 2018E
Net Interest Margin
Net Interest
Margin
Net Interest Margin (NIM) is one o the
Key Performance Indicators (KPIs) of the
bank.NIM gives an idea as to how much
net income a bank generates from its
core business. As per our assessment,
Net Interest Margin has hit the rock
bottom in the CY and is poised to rise in
the coming Financial Years. Falling cost
of deposit and rising CASA proportion
will be acting in favour of Net Interest
Margin and make an overall picture
about Federal bank rosy in the near
term.
Share Holder’s wealth:
Maximizing shareholder’s wealth is the core objectives behind existence of every business entities. In
order to gauge the accretion to the wealth, we have ratios like Earning Per Share, Return on Equity, Book
Value Per Share etc.
0
10
20
30
40
50
60
2012 2013 2014 2015 2016 E 2017E 2018E
Book Value Per Share
Book Value Per Share
Book Value per
share has been
steadily rising and
as per our
estimate ,it is
likely to cross Rs.
50 in FY 2018
8. Federal Bank Ltd– Fundamental Report
0.00
5.00
10.00
15.00
20.00
2011 2012 2013 2014 2015 2016 E 2017 E 2018 E
Return on Equity
Return on Net Worth
Liabilities 2011 2012 2013 14 2015 2016 E 2017E 2018 E
Share Capital 171.05 171.05 171.06 171.06 171.33 343.34 344.67 345.2
Total Reserves 4846.65 5421.25 6092.86 6689.65 7528.94 7825 8021.17 8716.61
Shareholder's Funds 5017.7 5592.29 6263.92 6860.71 7700.27 8168.34 8365.84 9061.81
Deposits 42988.45 48934.73 57611.17 59729.04 70822.69 76810.78 83614 93097
Borrowings 1888.36 4266.04 5239.05 5767.54 2392.98 3018 2927 3517
Other Liabilities & Provisions 1448.33 1751.17 1878.82 2287.55 1992.35 2340 2510 2617
Total Liabilities 51343 60544 70993 74645 82908 90337 97417 108292.81
Assets
Cash and Balance with Reserve Bank of
India 2936.35 2429.68 2748.86 3108.37 3381.98 3710 3935 4416
Balances with Banks and Money at Call 813.25 1108.7 977.67 1425.81 1402.46 1812 2216 2357
Investments 14407.9 17102.02 20854.49 23838.59 24189.81 26616 28014 33023
Advances 31957.81 37945.85 44327.42 43703.81 51529.19 55457 60422.03 65117
Net Block 292.92 337.03 412.08 413.84 446.1 471.12 515.81 562.8
Other Assets 934.61 1620.96 1670.03 2131.8 1932.16 2271 2314 2817.01
Total Assets 51343 60544 70993 74645 82908 90337 97417 108292.81
As per our estimate ,barring 2016E, return on equity will be on the path of steady rise . NPA woes and slow
down in non-interest income are likely to cause some amount of erosion in the return generated to Equity
share holders.
Financial Statements Rs. In Crores
9. Federal Bank Ltd– Fundamental Report
Financial Year 2011 2012 2013 2014 2015 2016 E 2017 E 2018 E
Interest Earned 4052.03 5581.72 6246.32 7005.7 7487.77 7633.17 8396.487 9152.171
Interest Expended 2304.49 3606.67 4208.94 4727.76 5056.33 5199.87 5459.864 5808.276
Net Interest Income 1747.54 1975.05 2037.38 2277.94 2431.44 2433.3 2936.624 3343.895
Other Income 518.33 532.2 664.64 685.18 878.54 746.52 903.2892 921.355
Operating Expenses 836.54 1008.06 1228.59 1493.5 1675.21 1718.56 1804.488 1894.712
Provisions and Contingencies 525.44 334.89 263.54 267.87 105.2 343.49 195.2062 235.6642
Profit before Tax 903.89 1164.3 1209.89 1201.75 1529.57 1117.77 1840.219 2134.874
Tax 315.42 392.79 359.68 372.83 517.48 338.38 588.8699 683.1595
Profit after Tax 588.47 771.51 850.21 828.92 1012.09 779.39 1251.349 1451.714
Share of Associate -32 -17.78 2.45 20.83 45.72 54.25 71 86
Consolidated Profit 556.47 753.73 852.66 849.75 1057.81 833.64 1322.349 1537.714
2016 Q3 2016 Q2 2016 Q1 2015 Q4 2015 Q3
Interest Earned 1902.76 1902.26 1913.15 1908.28 1870.1
Interest Expended 1297.56 1293.92 1308.39 1285.05 1282.94
Net Interest Income 605.2 608.34 604.76 623.23 587.16
Other Income 183.31 182.27 193.94 306 219.91
Operating Expenses 463.03 454.04 431.49 460.08 409.72
Provisions and Contingencies 75.11 87.28 153.1 39.78 -0.82
PBT 250.37 249.29 214.11 429.37 398.17
Tax 87.65 88.01 72.72 148.84 133.48
Profit after Tax 162.72 161.28 141.39 280.53 264.69
Quarterly results
Outlook and Valuation:
Banking Industry is going through its worst phase in terms of stressed assets at its peak. The most recent
quarterly financial result of banks unearthed huge amount of bad loan which is far above what industry and
street had expected. Asset quality review which is being conducted by RBI appears to have vowed to clean up
the balance sheet of banks by FY 2017 by flushing out the spiraling NPAs. Global growth concerns and
commodity route have increased stress level in the balance sheet of companies due to weakening realization
and decreased cash flow. These domestic and global scenario have posed huge challenge to Federal Bank
although its exposure to the most stressed iron and steel sector is insignificant. As far as Federal Bank is
concerned, the abrupt surge in bad loan during the current Financial Year has sent a shock wave to investors.
As we come closer to this Financial Year, we can see that bank has not yet been relieved from the grip of bad
loan woes. However, management exudes confidence that worst is behind now and bank is well prepared to
alleviate the concerns of its stakeholders through concerted efforts of the reinforced top management to
address NPA issues, renewed focus on loan growth ,digitalization and branch optimization etc.
10. Federal Bank Ltd-Fundamental
Our target price of Rs. 56 is based on the Gordon multi-stage growth model where we have applied
Residual Income Method of valuation. Our cost of equity is 12.54 % .We have applied a persistency factor
of 0.80 to arrive at a continuing residual value. Key hypothesis used while forecasting the financial
statement is that by FY 2017, the bank will get rid of most of its NPA worries and improve bottom line.
Similarly a sturdy pace of loan growth and a revival in growth momentum on non-banking operations
front will boost the top line.
Investors can accumulate the stock of Federal Bank Ltd on every dip and exit their investment when the
stock price reaches Rs. 56 with a holding period of 1 year.
Risks to Investment:
Below are the probable risk factors which investors have to bear in mind while buying stocks of Federal
Bank
Slower than expected corporate loan growth will impact top line growth which is expected to pick up in
FY 2017
Further slow down in Middle East economies will affect deposit flow from NRI segment and is likely to
cause dip in CASA proportion to over all deposit. This will erode Net Interest Margin of bank
Likelihood of more number of NBFCs obtaining bank license will intensify the competitive landscape
in banking sector. Moreover, the advent of payment banks is likely to pose challenges as far as current
and saving deposit space is concerned
Analyst's Disclaimer: This report reflects my personal opinion based on an in-depth study on some primary reports which
are available in public domain. Please do not make any investment decision purely based on this report. Please read it along
with other reports and make any investment decision after consulting your financial advisor. I will not be responsible in case
any one incurs any loss due to this report