Private sector Federal Bank on Friday said it has received approval from the RBI to re-appoint Shyam Srinivasan as its MD and CEO for three years.
Srinivasan took charge as MD and CEO of the lender on September 23, 2010.
“We wish to inform you that the approval from Reserve Bank of India has been received on July 9, 2021 for the re-aFederal Bank gets RBI nod to re-appoint Shyam Srinivasan as MD & CEO for 3 yearsppointment of Shyam Srinivasan as the MD & CEO of the bank for a period of three years with effect from September 23, 2021 till September 22, 2024,” Federal Bank said in a regulatory filing.
Earlier in July 2020, the South-based lender had received RBI’s nod for reappointment of Srinivasan as Managing Director and Chief Executive Officer till September 22, 2021.
He had joined Federal Bank with the experience of over 20 years with leading multinational banks in India, Middle East and South East Asia. He has significant expertise in retail lending, wealth management and small and medium enterprises (SME) banking, it said.
Srinivasan is an alumnus of the Indian Institute of Management, Calcutta, and Regional Engineering College, Tiruchirapally.
The partnership will enable to issue a savings account, equipped with a debit card, in under three minutes.
Federal Bank said on Thursday that it is partnering with Fi, Bengaluru-based neobank for salaried millennials. Founded in 2019, Fi is the brainchild of ex-Googlers who pioneered Gpay – Sujith Narayanan and Sumit Gwalani.
The partnership will enable to issue a savings account, equipped with a debit card, in under three minutes.
Every aspect of Fi’s design minimises friction for the digital-first generation. The Fi app is one-of-a-kind in its approach, as its users will earn rewards for saving money as well – unlike the market.
Sujith Narayanan, CEO and co-founder, Fi, said: “Our platform leverages cutting-edge tech and data science for deriving actionable insights that empower users to take control and do more with their finances. We look forward to delivering a first-of-its-kind, personalised, flexible and transparent banking experience and building long-term customer relationships.”
Shalini Warrier, executive director, COO and business head – retail, Federal Bank, said: “We are delighted to be the sole partner bank for this innovative neobank, Fi. The entire proposition brings together the best of what both entities have to offer. The slick customer experience via the app is complemented with the stability, safety and technological prowess of Federal Bank.”
The bank is likely to raise capital in the second half of 2021 and is also planning to come out with a credit card of its own.
Federal Bank expects to grow by 8 % this fiscal and achieve double-digit growth in FY22 with the economy picking up. Shyam Srinivasan, MD & CEO of Federal Bank, told FE that growth is broad-based and advances are seen increasing in all sectors except large corporate loans.
“So far this fiscal we have grown around 6%. Products like gold loans have done extremely well. Business and commercial banking is growing and home loans have started picking up in Q3. Auto loans have done well in select geographies,” he said.
“Only in large corporate loans, we have seen a de-growth in Q3. Going into Q4 and as the economy picks up we see opportunities in this sector. Normally we have grown by 1.6-1.8 times the industry average, and if India grows meaningfully next fiscal, we should grow by 16-18 % in FY22,” he added.
The Kerala-based lender had reported that in Q3 total advances grew by 6%, while large corporate loans of `25 crore and more reported a decline of 7% year-on-year (y-o-y). Retail advances grew by 16% y-o-y in Q3, while agri loans reported a growth of 24 %.
The bank reported a third-quarter net profit of Rs 404.10 crore. On the asset quality, the lender said that the proforma slippage for the whole fiscal would be as normal as any business year. The proforma slippage for the first three quarters is Rs 1,000 crore and for the fourth quarter, it would be around Rs 400 crore. Total slippage of Rs 1,400 crore is normal in a year,” he said.
Federal Bank also reported that restructuring will be lower at Rs 1,500 crore as against the earlier estimate of Rs 3,500 crore with most customers doing better and not opting for it. “We thought earlier that restructuring would be much higher due to the Covid impact. Thankfully it is at a much lower level. If the customers service their dues in the next 2-3 years, the Covid impact will be sorted out. We have also provisioned adequately for it,” he added.
The bank increased the provision coverage ratio by 1245 bps to 77.10%. The provision coverage ratio including the proforma slippages would have been 66.12%.
Regarding branch expansion, Srinivasan said that the bank has plans to remain branch light and distribution heavy. “In the last five years, we have added only 20 branches, while in my first five years we added 700 branches. We have added a lot of distribution in the likes of relationship managers and digital distribution,” he said. The bank has 1284 branches.
“Federal bank is a high-quality digital franchise and we are working towards achieving consistency in delivery. We want to be a bank which is a consistent performer in the long-run like Dravid and Roger Federer,” he added.
The bank is likely to raise capital in the second half of 2021 and is also planning to come out with a credit card of its own.
Gold loans registered a growth of 67.26% YoY and 16% QoQ.
Federal Bank on Wednesday reported an 8.3% year-on-year (Y-o-Y) decline in its third quarter net profit to Rs 404.10 crore, mostly because of higher provisioning for bad loans. The lender had reported a net profit of Rs 440.64 crore in the year-ago period and Rs 307.62 crore in the second quarter of the current fiscal.
Provision and contingencies for the quarter under review stood at Rs 421 crore, an Y-o-Y increase of 161% from Rs 161 crore provided in the year ago period. The bank recorded an operating profit of Rs 963 crore during the quarter, against Rs 743.82 crore in the same quarter last year.
Shyam Srinivasan, MD & CEO, said: “The bank continues its strong operating momentum despite external turbulence. This has helped the bank strengthen its balance sheet further. The growth in the net interest margin is encouraging given the challenging operating environment. Gold loan continues its golden run, and that is promising. Provisions have been increased substantially to absorb any unfavourable turn of events. Asset quality issues have been kept in check despite external headwinds.”
Gross NPA as a percentage improved from 2.99% to 2.71%, while net NPA improved from 1.63% to 0.60% on a Y-o-Y basis. The provision coverage ratio improved substantially from 45.30% to 77.10%.
However, if the bank had classified borrower accounts as NPA after August 31, 2020, the bank’s proforma gross NPA ratio and proforma net NPA ratio would have been 3.38% and 1.14%, respectively, sources said. The Kerala-based lender said at the end of the December 2020 quarter, total deposits stood at Rs 161,670 crore, compared with Rs 144,592 crore in the year-ago period.
Advances at the end of Q3 stood at Rs 128,174 crore, compared with Rs 120,861 crore in the third quarter of the last fiscal. Gold loans registered a growth of 67.26% YoY and 16% QoQ.
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