Federal Bank shares tank 7.5%

Shares of Federal Bank Ltd fell as much as 7.5 per cent to Rs 104.80, posting the biggest intraday percentage drop since November 2016. The shares plunged as the third-quarter net profit missed analysts' estimates by a small margin.

Federal Bank posted a 26.43 per cent growth in net profit in the third quarter at Rs 260.01 crore compared to the corresponding period of the previous fiscal. Operating profit increased by 18 per cent to reach Rs 561.40 crore as on December 31.

Gross bad loans as a percentage of total loans stood at 2.52 per cent at end-December vs. 2.39 per cent at end-September. Slippages increased sequentially, driven by higher non-performing loans (NPLs) in corporate and retail (education loans) segment, according to Morgan Stanley.

The bank has indicated slippages around current levels and likely increase in credit cost during Q4 owing to higher provisioning on security receipts, it says.

“Management doesn't expect any large one-offs but we think overall NPL formation may not come down quickly,” Jefferies analysts say.

Up to Monday's close, the stock had risen 56.6 per cent in 12 months compared with a 38.2 per cent increase in the Nifty private bank index.