Federal Bank Q4 Review - Execution Remains Key: Dolat Capital

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Dolat Capital Report

Federal Bank Ltd.’s core operating metrics were behind estimates, with net interest income and core pre-provision operating profit growing at 17% and 40% respectively.

Asset quality however continued to be resilient with sequentially stable pro forma gross non-performing asset ratio and provision coverage ratio at 3.41%/65% respectively.

Pro forma slippages at 1.9% for Q4 FY21 and ~1.6% for FY21 were fairly contained and amongst the lowest in industry.

Higher profit after tax was led by sharp decline in provisions as the bank utilized most of the Covid-19 buffers made in previous quarters, aiding return on asset of 1%.

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