- 24 Feb 2025
- ICICIdirect Research
FEDERAL BANK AIMS TO BECOME INDIA’S FIFTH-LARGEST PRIVATE SECTOR BANK WITHIN 3-5 YEARS
FEDERALBNK - 177 Change: 0.68 (0.39 %)News: Federal Bank aims to become India’s fifth-largest private sector bank within 3-5 years, according to MD KVS Manian. Currently ranked ninth by market capitalization, the Kerala-based bank plans to expand both organically and through acquisitions in sectors like microfinance, asset management, wealth management, affordable housing, and investment banking. Its ‘Project Breakthrough’ initiative focuses on enhancing NIMs, diversifying products, increasing fee income, optimizing costs, and revamping digital strategies to modernize operations and establish a national presence.
View: The bank plans to open about 450 branches by FY28, increasing its total branch count to 2,000. Additionally, Federal Bank aims to reduce reliance on partner-sourced credit cards from 70% to 55% by FY28. By increasing fee income, the bank seeks to boost its other income-to-assets ratio from 1.1% to 1.7%. It also plans to reduce the share of low-yielding advances in its portfolio from 64% to 58% by FY28.
Impact: Neutral