Q2 2025 Federal Bank Ltd Earnings Call Transcript
Key Points
- The Federal Bank Ltd (BOM:500469) achieved its highest-ever net profit of INR 1,057 crores, reflecting a year-over-year growth of 10.79%.
- The bank's asset quality improved with Gross Non-Performing Assets (GNPAs) reduced to 2.09% and Net NPAs to 0.5%.
- Net Interest Income (NII) reached its highest level at INR 2,367.23 crore, marking a year-over-year growth of 15.1%.
- The bank's CASA ratio increased by 80 basis points quarter-over-quarter, positioning it among the industry's leaders in CASA growth rate.
- The Federal Bank Ltd (BOM:500469) reported a significant turnaround in NR savings with a 6.8% growth during the first half of FY '25, reversing last year's decline.
- Deposit growth in the quarter was only 1%, raising concerns about how the bank plans to accelerate it in the coming quarters amid high competition.
- There was a divergence between loan growth and deposit growth, with the latter lagging, which could pressure the bank to slow down loan growth or increase deposit mobilization.
- The bank's unsecured loan mix remains low, which could limit potential yield improvements.
- The bank is facing challenges in maintaining its Net Interest Margin (NIM) compared to other large private banks.
- There is a slight uptick in slippage rates for credit cards and personal loans, although it remains a small percentage of the overall portfolio.
Ladies and gentlemen, good day, and welcome to the Q2 FY '25 Earnings Conference Call of the Federal Bank Limited. (Operator Instructions)
Please note that this conference is being recorded.
I now hand the conference over to Mr. Souvik Roy, Head Investor Relations, The Federal Bank Limited. Thank you, and over to you, sir.
Thank you, Sagar, and thank you, everyone. Warm welcome to all participants. We appreciate you're taking the time to join us today.
As you are aware, there has been a recent transition in leadership with Mr. Krish Manian assuming the role of Indian CEO from Mr. Sham Srinivasan as of the 23 of last month. On behalf of the entire bank, we extend a heartfelt welcome to Mr. Manian, and we are confident that under his guidance, we will reach new heights of the success.
We have just uploaded the results and our presentation on the exchanges. And in case you could not review them prior to this call, please feel free to
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