Deposit growth lagging loan growth
Deposit growth was only 1% QoQ vs loan growth of 19.45% YoY, leading to a CD ratio above 85%. Management aims to close the gap but faces competitive pressure.
FEDERALBNK / Q2-FY25 / risks
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Federal Bank · Material risks, their source context, and severity in the latest available quarter.
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Material risks this quarter
high
MFI portfolio stress
MFI slippages have increased, though management claims they are below industry levels due to conservative underwriting and geographic concentration in southern states.
NIM pressure from penal charge reclassification and rate cuts
NIM was impacted by 7bps due to penal charge reclassification. Potential rate cuts could further pressure margins, though management expects underlying NIM improvement.
Credit card embargo resolution timeline uncertain
RBI embargo on co-brand credit card reissuance remains unresolved. Management expects to approach RBI soon for one model, but other models may take longer.