Federal Bank pares gains as lender denies merger report; rises 9% intra-day
Shares of Federal Bank hit a record high of Rs 129.70 as they rallied 9 per cent on the BSE in Monday’s intra-day trade amid heavy volumes. The spike in volumes came after reports emerged of the bank’s merger with another private sector bank.
On its part, Federal Bank has denied the news report saying it is speculative in nature.
“We wish to clarify categorically that the news report of a merger between Federal Bank and another private bank is speculative in nature,” Federal Bank said in exchange filing on clarification on news item appearing in media.
In this regard, we would like to state that there is no information available with the Company as of today, which is required to be reported under extant SEBI Regulations, and which may have a bearing on the stock price of the Company, Federal Bank said. CLICK HERE FOR MORE DETAILS
At 12:03 pm, Federal Bank was trading nearly 4 per cent higher at Rs 123.90, as compared to 0.63 per cent rise in the S&P BSE Sensex. The average trading volumes on the counter nearly doubled, with a combined 49.06 million equity shares having changed hands on the NSE and BSE.
Meanwhile, in the past three months, the stock price of Federal Bank has appreciated by 44 per cent as the bank reported a healthy operational performance led by strong business growth in June quarter (Q1FY23). In comparison, the S&P BSE Sensex has gained 6 per cent during the same period.
In Q1FY23, Federal Bank reported the highest-ever net profit of Rs 601 crore, up 64 per cent year-on-year (YoY) from Rs 367 crore in Q1FY22. Net interest income grew 13 per cent YoY at Rs 1,605 crore from Rs 1,418 crore in a year ago quarter. The gross non-performing asset (NPA) and net NPA ratios improved 81 bps and 29 bps respectively. GNPA and NNPA brought down to 2.69 per cent and 0.94 per cent respectively.
Management confidence guiding growth of 16-18 per cent remains encouraging. The bank’s healthy business traction and diversified mix to aid earnings. Digital & fintech partnerships to aid growth in deposit franchise. The focus on high yield products (CV/CE, micro & personal loans) to aid margins, analysts at ICICI Securities had said in their result update.
Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.
As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.
Support quality journalism and subscribe to Business Standard.
Comments are closed.