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The Federal Bank Ltd Stock Analysis

Mid Cap
Evaluated by 5770 users | BSE: 500469 | NSE: FEDERALBNK |
Bank - Private

The history of Federal Bank dates back to the pre-independence era. The Bank was incorporated on April 23, 1931 as the Travancore Federal Bank Limited, Nedumpuram under the Travancore Companies Regulation, 1916. Late K.P. Hormis, the visionary banker and...

1. Right Stock
Very Good
2. Right Price
3. Right Time

Analysis of Financial Track Record

Data adjusted to bonus, split, extra-ordinary income, rights issue and change in financial year end
Financial track record gives insight into the company's performance on key parameters over the past ten years. MoneyWorks4me’s proprietary colour codes make it easy for retail investors to gauge the company’s past performance.
The Federal Bank Ltd has performed well in some of the past ten years indicating its past ten year financial track record is somewhat good
 Mar'12Mar'13Mar'14Mar'15Mar'16Mar'17Mar'18Mar'19Mar'20Mar'21TTM
Net Interest Income (Rs. Cr.)1,975-4,2092,2782,4312,5673,1313,6884,3194,9125,8796,028
Y-o-Y Gr. Rt.33--313.1%NA6.7%5.6%22%17.8%17.1%13.7%19.7%-
Total Income6,1146657,6918,3668,6359,86711,07512,97115,47216,27216,364
Y-o-Y Gr. Rt.--89.1%1057.2%8.8%3.2%14.3%12.2%17.1%19.3%5.2%-
Adjusted EPS (Rs.)
Adjusted Earning per Share is the company’s net profit per share after adjusting for extra-ordinary/exceptional items
4.414.984.976.172.835.034.746.577.98.348.07
Y-o-Y Gr. Rt.-12.9%-0.2%24.1%-54.1%77.7%-5.8%38.6%20.2%5.6%-
Book Value per Share (Rs.)
The total value that a company will fetch upon liquidation (if it is closed down), after settling all obligations is called its Book Value. Book value of a company includes only tangible assets. Book value allocated to each outstanding share is called Book Value per share
32.6636.5940.0844.9146.8851.8962.2167.9774.3682.6584.42
Y-o-Y Gr. Rt.-12%9.5%12.1%4.4%10.7%19.9%9.3%9.4%11.2%-
To view Net Profit/Total Funds (%) Colour Rating Guide click here
Net Profit/Total Funds (%)
  • >1.25 : Very Good
  • 1-1.25 : Somewhat Good
  • <1 : Not Good
Net Profit/Total Funds (%)1.382.81000.550.810.710.860.90.85-
To view Net NPA to Net Advances (%) Colour Rating Guide click here
Net NPA to Net Advances (%): Colour Rating Guide
  • < 0.5 : Very Good
  • 0.5-1 : Somewhat Good
  • >1: Not Good
Net NPA to Net Advances (%)0.540.980.740.731.641.281.691.481.3101.28
To view Capital Adequacy Ratio Colour Rating Guide click here
Capital Adequacy Ratio: Colour Rating Guide
  • > 12% : Very Good
  • 9%-12% : Somewhat Good
  • <9%: Not Good
Capital Adequacy Ratio - - - - - - - - - 0%-
Standalone financials take only the parent company into account while consolidated financials take into account financials of the parent company as well as of all its subsidiaries. In most companies consolidated financials should be used for analysis.
The Federal Bank Ltd. should be analysed on a Consolidated basis
CAGR
CAGR Colour Code Guide
  9 yrs 5 yrs 3 yrs 1 yr
Net Interest Income12.9%18%16.8%19.7%
Total Income11.5%13.5%13.7%5.2%
Adjusted EPS
Adjusted Earnings per Share is the Company’s net profit per share after adjusting for extra-ordinary/exceptional items.
7.3%24.1%20.7%5.6%
Book Value per Share
10.9%12%9.9%11.2%
Share Price 8.6% 6.4% -0.2% 60.7%
Key Financial Ratios
RATIOS \ YEARSMar'12Mar'13Mar'14Mar'15Mar'16Mar'17Mar'18Mar'19Mar'20Mar'21TTM
Interest Earned / Total Income91.3091.0989.590.6489.0289.5289.7187.8487.9787.18
Margins
To view Margins Colour Rating Guide click here
Margins: Colour Rating Guide
  • >2.75 : Very Good
  • 1.75-2.75 : Somewhat Good
  • <1.75 : Not Good
NIM (%)3.374.244.724.322.892.862.782.822.833.060
Performance Ratios
To view Performance Ratios Colour Rating Guide click here
Performance Ratios: Colour Rating Guide
  • >15% : Very Good
  • 12%-15% : Somewhat Good
  • <12% : Not Good
Return on Equity (%)14.5614.3512.6413.916.1910.048.589.9610.9710.529.56
Liquidity Ratio
To view Liquidity Ratio Colour Rating Guide click here
Liquidity Ratio: Colour Rating Guide
  • >35 : Very Good
  • 25-35 : Somewhat Good
  • <25 : Not Good
CASA (%) 27.5427.1731.2530.7632.9132.8233.6432.3730.734.06-
Corporate Governance What do we look at?
Corporate Governance
Board Credentials
Promoter's holding
Transparency
Integrity
Entity Percentage Holding
Institutions 67.94%
Non-Institutions 32.06%
Pledged *0.000.000.000.000.000.000.000.000.000.00
* Pledged shares as % of Promoter's holding (%)

MoneyWorks4Me analysed the past 10-year performance of The Federal Bank Ltd and arrived at the following conclusion:

Past 10 year's financial track record indicates that The Federal Bank Ltd is a average quality company. However, for specific investment actions please connect with your investment advisor.

The 5-year analysis of The Federal Bank Ltd's performance infers:

The Federal Bank Ltd earnings have grown by 24.1%, whereas share price has appreciated 6.4% CAGR over the past five years, indicating the company's share price is likely undervalued. However, for specific investment actions please connect with your investment advisor.

We analysed the performance of The Federal Bank Ltd share prices over the last 10 years. Here is what we found out:

The Federal Bank Ltd share price has appreciated 7.9% annually over the past ten years.

The history of Federal Bank dates back to the pre-independence era. The Bank was incorporated on April 23, 1931 as the Travancore Federal Bank Limited, Nedumpuram under the Travancore Companies Regulation, 1916. Late K.P. Hormis, the visionary banker and founder took up the reigns in 1945 and built the bank a nationwide institution. The Bank's name was changed to The Federal Bank Limited on December 2, 1949. The Bank was licensed under the Banking

The history of Federal Bank dates back to the pre-independence era. The Bank was incorporated on April 23, 1931 as the Travancore Federal Bank Limited, Nedumpuram under the Travancore Companies Regulation, 1916. Late K.P. Hormis, the visionary banker and founder took up the reigns in 1945 and built the bank a nationwide institution. The Bank's name was changed to The Federal Bank Limited on December 2, 1949. The Bank was licensed under the Banking Regulation Act, 1949, on July 11, 1959 and became a scheduled commercial bank under the Second Schedule of Reserve Bank of India Act, 1934 on July 20, 1970. Today the bank is present in different States, Delhi NCT and Union Territories and the bank is listed in BSE, NSE and London Stock Exchange.

Federal Bank is a major Indian commercial bank in the private sector headquartered at Aluva, Kerala having many branches and ATMs spread across different States in India. The Bank is a pioneer among traditional banks in India in the area of using technology to leverage its operations and was among the first banks in India to computerize all its branches.

Business area of the bank

The Bank offer its customers, a variety of services such as Internet banking, Mobile banking, on-line bill payment, online fee collection, depository services, Cash Management Services, merchant banking services, insurance, mutual fund products and many more as part of its strategy to position itself as a financial super market and to enhance customer convenience.

Products & Services

Personal Banking - The bank provides a wide range of banking products and services such as saving accounts, deposits, personal loans, ATM services, tele-banking services, RTGS, insurance, etc.

NRI Banking - The bank offers a wide range of NRI services through all its branches. Non-Resident Indians (NRI) can open Non-Resident External (NRE), Non- Resident Ordinary (NRO) accounts in Indian Rupee. You can also have Foreign Currency Non- Resident (FCNR) accounts in six foreign currencies approved by Reserve Bank of India (US Dollar, British Pound, Euro, Japanese Yen, Canadian Dollar and Australian Dollar). Returning NRIs can open Resident Foreign Currency (RFC) account with any of their branches.

SME-Business Banking - The bank offers a parameterized loan and various current account products tailor-made for each sector under SME. Competitive pricing, relaxation in collateral security, collateral free loans with CGTMSE cover, customization in various current account products, cash management services, internet bill payment facility etc are some of the features of their products which makes them a real friend of entrepreneurs.

Corporate Banking - The bank offers customized structured products to meet the specialized requirements of corporates, institutions and business clients. Each member of their Corporate Finance team brings with him a wealth of transaction experience across transaction varieties and sectors to cater to you better.  The bank has emerged as one of the leading private sector banks in the country, in providing a gamut of products for industry, trade and infrastructure sectors.  The bank serves a wide range of customers across varying industries, segments and regions.

Awards and accolades

  • 2008-09: The Dun & Bradstreet Banking award 2009.
  • 2009-10: The ‘Great Mind Challenge' award.
  • 2010-11: The IDRBT award.
  • 2011-12: Federal Bank received the NPCI award being the highest contributor in number of transactions in the month of August 2012.
  • 2011-12: Federal Bank received the NPCI Award for Excellence in promotion of Inter Bank Payment Service.
  • 2011-12: Federal Bank received IDRBT Banking Technology Excellence Awards for year 2011-12.
  • 2011-12: Global CSR Award for ‘Best Corporate Social Responsibility Practice Overall’.
  • 2011-12: Federal Bank bagged the prestigious Golden Peacock Award for its CSR Initiatives.
  • 2011-12: KMA Excellence Awards 2011.
  • 2011-12: ACI Excellence Awards 2012.
  • 2012-13: Federal Bank won ACI Excellence Award 2013 for Apna Gold.
  • 2012-13: Federal Bank was awarded ‘The Best Bank among Private Sector Banks’.
  • 2012-13: Federal Bank won two IDRBT Awards for Excellence in Banking Technology.
  • 2013-14: Federal Bank won the Banking Frontier's Finnoviti 2013 Award for its innovation Virtual Accounting System (VAS).
  • 2013-14: Federal Bank won IBA Innovation Award 2013 for FedBook.
  • 2013-14: Federal Bank was awarded ‘The Best Bank among Private Sector Banks’.
  • 2013-14: Federal Bank was awarded the ‘Most Socially Committed Organization’.
  • 2014-15: Federal Bank wins IDRBT Banking Technology Excellence Awards.
  • 2014-15: Federal Bank Bags CNBC Award for Financial Inclusion.
  • 2014-15: Federal Bank wins Greentech HR Award 2014.
  • 2014-15: Federal Bank won MasterCard Innovation Award 2014.
  • 2014-15: Federal Bank won ACI Excellence Award 2014 for the category ‘Customer Service’.
  • 2015-16: Federal Bank gets ET Best Corporate Brand 2016 Award.
  • 2015-16: Federal Bank wins the Skoch Smart Technology Award 2015 for FedBook Selfie.
  • 2015-16: Federal Bank gets Banking Frontiers Inspiring Work place Award for Best HR & Talent Practice.
  • 2015-16: Federal Bank bags IDRBT Award for Digital Banking, Analytics and Big Data in mid-sized Banks Segment.
  • 2015-16: Federal Bank wins Banking Frontier's Finnoviti 2015 Award.
  • 2016-17: Federal Bank received ‘Runner Up’ award for maximum RUPAY cards issued bank – 2016.
  • 2016-17: Federal Bank won the award for the best use of Digital and Channels Technology among Small banks in the IBA Banking technology Conference, Expo & Awards 2017.
  • 2016-17: Federal Bank won SKOCH Smart Technologies Gold Award for 2016.
  • 2016-17: Federal Bank gets MasterCard Innovation Awards 2016 under Two categories.
  • 2016-17: Federal Bank received the prestigious 6th Annual Greentech HR Award for ‘Technology Excellence in HR’.
  • 2017-18: Federal Bank Wins National Payment Excellence Award.
  • 2017-18: Instant Account Opening received awards for SKOCH Technologies for Growth Award 2017 by SKOCH group.
  • 2017-18: Skoch award in Banking and Finance Gold category for ‘Federal Bank cross border remittance solution’ 2018.
  • 2017-18: Federal Bank has won best innovator at ‘KMA NASSCOM IT awards’.
  • 2018-19: Federal Bank has won the Best Bank of the Year award at the Dhanam Banking and Finance Summit.
  • 2018-19: Federal Bank won 1st prize in best technology bank award 2019.
  • 2018-19: Federal Bank Wins National Payment Excellence Award.
  • 2018-19: Federal Bank was adjudged winner of ‘best use of blockchain technology’ at Drivers of Digital awards 2018.
  • 2019-20: Federal Bank has won the Bank of the Year 2019 Award at the Dhanam Banking and Finance Summit.
  • 2019-20: Federal Bank has conferred with the Best Bank Small – 1st Runner Up Award under the Overall Best Bank category at the 11th edition of Magna Awards instituted by Business world.
  • 2019-20: Federal Bank has won Indian Express Group Technology Senate Award for FedRecruit.
  • 2019-20: Federal Bank won 1st prize in Best Technology Bank award organized by IBA.

Milestones

  • 1931: The Federal Bank Limited (the erstwhile Travancore Federal Bank Limited) was incorporated with an authorised capital of Rs 5000 at Nedumpuram, a place near Tiruvalla in Central Travancore on 23/4/1931 under the Travancore Company's Act. It started business of auction -chitty and other banking transactions connected with agriculture and industry. The bank though successful in the earlier periods, suffered set backs and was on the verge of liquidation. 
  • 1946: The Bank opened its second branch at Angamally.
  • 1947: In the Board Meeting, it was resolved to change the name of the Bank as ‘The Federal Bank Limited’. The third branch of the Bank was opened at Perumbavoor.
  • 1959: The Bank was licensed under Sec.22 of the Banking Companies Act, 1949. Bank floated several kuries one after another. It also introduced several new deposit schemes. These strategies helped the Bank to grow at a greater pace.
  • 1965: The St. George Union Bank Ltd. Puthenpally was merged with the Bank.
  • 1968: The Marthandom Commercial Bank Ltd. Trivandrum was amalgamated with the Bank.
  • 1970: The Bank became a Scheduled Commercial Bank in 1970, which also coincided with the Silver Jubilee Year, since the Bank commenced its operation in Aluva.
  • 1976: Bank opened 53 branches during the year 1975 and 42 branches 1976. The total number of branches reached 276 from 114 in 1973.
  • 1977: The paid up capital grew from Rs 10.66 lakh to Rs 100 lakh.
  • 1989: Commenced Merchant Banking Operations.
  • 1993: Roped in ICICI group as a shareholder through private placement.
  • 1997: Bank's first ATM was inaugurated at Ernakulam North.
  • 1999: Bank's 400th branch was inaugurated at Calcutta- Shakespeare Sarani.
  • 2000: The Bank has commenced Internet Banking 'FedNet' on with software support from Infosys Technologies.
  • 2000: Launched Depository Services in association with NSD.
  • 2001: Wide Area Network was launched connecting Regional Offices at Mumbai, Bangalore, Chennai, Ernakulam and Chennai F & I with Head Office.
  • 2003: International Debit Cards launched.
  • 2004: Federal Bank becomes the first traditional bank to network all its branches and attain 100% connectivity.
  • 2004: Co-branded credit cards launched in association with ICICI Bank.
  • 2004: First Bank to launch automated telephone bill payment through Interactive Voice Response System (IVR). 
  • 2004: Bank launched an innovative product 'Fed-e-Pay' for automated payment of utility Bills.
  • 2005: Federal Bank in association with AMRITA super specialty hospital launches Fed+Amrita, an innovative online system for fixing medical consultation, Health check up, and inpatient payments from anywhere. 
  • 2006: Bank entered into Life Insurance Joint Venture with IDBI & FORTIS.
  • 2007: A full fledged Data Center was set up by the Bank.
  • 2007: Bank formed a Centralized Processing Centre for centralizing the account opening process to make it quick and efficient.
  • 2007: All branches/offices of the Bank were migrated to Centralised Banking Solution (CBS), Finacle.
  • 2008: Opened first overseas Representative Office at Abu Dhabi, UAE.
  • 2008: Bank started providing Online Stock Trading facility to the customers in association with Geojit Financial Services.
  • 2009: Launched three new variants of Visa Debit Cards – Platinum, Gold and Shop'n Save.
  • 2010: Launched Point Of Sale (POS) Terminal Business.
  • 2010: Federal Bank became part of National Financial Switch ATM Network – the largest ATM network in India. 
  • 2010: Launched Debit Cards in association with MasterCard.
  • 2011: Federal Bank launched general insurance cover for the customers for stabilizing the relationship with the clients.
  • 2011: Launch of Fed Pravasi Oriental Insurance for NRI Patrons.
  • 2011: Bank signed Inward Remittance Agreement with Samba Bank, one of the largest banks in KSA.
  • 2012: Bank launched Fast Biz Visa International Business Debit Card to SME/Corporate Clients  .
  • 2012: Federal Bank made tie up with Manipal Global Education services for offering one year Post graduate diploma in Banking and Finance.
  • 2013: Federal Bank launched its ‘Online Religious Offering Services Bouquet’ in association with the prestigious Sree Padmanabhaswami Temple, Thiruvananthapuram.
  • 2013: Inauguration of Federal Bank's 3rd Currency Chest at Mumbai.
  • 2013: Bank revamped its Corporate website to a portal based platform, offering new features to customers.
  • 2014: Federal Bank opened its first International Standard 24X7 Banking facility christened Federal Experience Center at Nedumbassery, Kochi. 
  • 2015: Federal Bank launched VConnect - an exclusive video conference facility that enables customers to interact with Bank's Relationship Managers face to face from any part of the world. 
  • 2015: Federal Bank joined hands with Startup Village in Kerala and MobME wireless to launch India's first focused FinTech Accelerator Programme.
  • 2015: Federal Bank and SBI Card announced their collaboration to launch Federal Bank-SBI co-branded credit cards.
  • 2015: Federal Bank launched Scan N Pay, an innovative payment app for smartphones.
  • 2015: Bank introduced Mobile Recharge facility through its ATMs.
  • 2015: Bank launched FedBook Selfie - a mobile based SB account opening application which is first of its kind in India.
  • 2016: Federal Bank launched Payment Gateway facility for KSEB electricity Bill payment.
  • 2016: Federal Bank has launched ‘Launchpad', an exclusive outlet for start-ups.
  • 2016: Federal Bank launched its Unified Payments Interface (UPI) application 'Lotza'.
  • 2017: FedCorp - mobile banking app for corporate customers was introduced to empower them with the ease of banking at the fingertips.
  • 2017: Federal Bank introduced PayLite- a comprehensive web based solution for processing bulk transactions of corporate clients.
  • 2018: Bank launched the Instant Account Opening (IAO) through Tab and Web based account opening modes in branches.
  • 2018: Bank launched Fed E Biz, a complete 360 degree Digital Omni-channel Transaction Banking Platform for Corporates.
  • 2019: Introducing new Savings Account scheme - ‘GBD SUPER S1’ - for PSUs and Government Departments and bank also introduced Internal Ombudsman Scheme in the Bank. 
  • 2019: Introducing Certificate download portal for customers.
  • 2019: Bank developed a new solution, avail Advance Against Deposit by sending just an SMS/ making a Missed call. Customers can avail the AAD without any paperwork & instantly, without visiting the branch. 
  • 2020: Federal Bank joins hand with Maruti Suzuki to provide dealer loans, retail car financing.
  • 2020: Federal Bank partners with Magicbricks for quick disposal of immovable properties.
  • 2020: Federal Bank, Innoviti Payment Solutions enter into partnership to offer convenient EMI options.
Puchho Befikar
SEBI Registered: Investment Adviser - INA000013323

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