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Best Bank on Efficiency & Financial Strength
Posted by :
Vidhur2009As Economic Times , Investor Guide,dated 23rd Nov`09, Federal Bank is India`s No-1 bank on Efficiency ( Net interest margin,business per employee,return on assets),Financial Strength ( Capital Adequacy Ratio,NPA`s)leaving behind market leaders like SBI and HDFC far behind. Dear Boarders don`t give up hope, its only that it has failed to draw investors attention so far which I feel will not be the case with above article in ET. I strongly feel based on inherent strengths of bank i.e large NRI`s deposits and highest net interest margin i.e 4% above in banking sector it will touch 500+ in years time.Thanks....
SATISFYING REPORT
Posted by : mitsee
Of all large banks, only three — Axis Bank, Bank of India and HDFC Bank —could feature in the list of top 10 most efficient banks. Federal Bank topped the list as the most efficient bank.
Its net interest margin is in the range of 4%, while most of the other banks struggle to reach the magical mark of 3%. Its return on assets is in the range of 1.3%-1.5%, which is among the best in the industry.
The study was a kind of eye opener in the sense that it showed that smaller banks like Karur Vyasa Bank and City Union Bank are more efficient than their larger peers.
Karur Vyasa Bank boasts of third highest RoA (return on assets) in the industry. That coupled with above average net interest margin (NIM) helped it sneaking in the list of top 10 most efficient banks.
Similarly, City Union Bank has the second highest RoA and sixth highest NIM in the industry. IDBI Bank has the best business per employee in the sector, but due to its dismal NIM and RoA, the bank is not among the best in the industry.
On this parameter too, Federal Bank ranks the best followed by Yes Bank and Indian Bank. Federal Bank has the highest CAR (capital adequacy ratio) along with one of the lowest non-performing assets (NPAs). Karur Vyasa Bank comes as a strong bank even on this count.
Many banks performed well only on one parameter and could not replicate that performance on the other parameters, which pulled down their rank. For instance, Kotak Mahindra Bank has the second highest CAR in the industry. However, the bank has one of the highest NPAs in percentage terms, which has pulled down its ranks. HDFC Bank features in top 10 banks even in terms of financial strength.
This makes it an exceptional bank, as it ranks among the best across all parameters. Indian Bank came third in this list, besides being the fourth most efficient bank. In fact, unlike other parameters, PSU banks did not flock here, primarily because their capital adequacy ratio is less than their private sector counterparts.
BUT GROWTH WISE IT IS RANKED 28..
OVERALL 8TH...
WHY TRADE BELOW BV
Posted by :
GuestThere is huge selling pressure above 250. Right issue price was 250. People are trying to cash profit. As we know lot of FII`s have taken position on this scrip. So whenever they feel to book profit above 250, the selling pressure arises...
WHY TRADE BELOW BV
Posted by : mitseethanks, lets see wat happens, i have lost all hopes of any rise......
MERGER BETTER NOT HAPPEN
Posted by : mitseewith the church opposing the merger and taking all steps to see tat the merger doesnt happen,its better tat the merger doesnt happen....And why is fedbnk so much interested in csb which will eventually lead to overlapping...rather it can look for other banks like south indian bank.....
Great opportunity
Posted by : Guest
Can`t see what the fuss is about. Its available at less than book value and for years nobody has come out with a reasonable explanation for it. When it gets taken over the patient investor will benefit greatly.
Meanwhile people may be worried about asset quality or NIMs or loan growth or retail loan defaults.
For heavens sake, its a bank. What do you expect. Personally I am happy that it seems to be fairly aggresive, this is a good sign for the future. Aggressive banks get into temporary trouble when these down turns arrive, but remember there is no danger of collapse, management seems very transparent and it has clear future plans.
Can`t explain why this has to trade at a significant discount, but I`m happy that any amount of stock is available at valuations that I don`t need to worry about.
Can`t lose!...
Buy Both Federal and South indian bank
Posted by :
mabelMontek has clearly told financial sector reforms are coming.Both banks are fulln owned by public or there is no promoter holding.Once the reforms come there will be a scramble for these two as both will be targets for other banks both private and public...
WHY TRADE BELOW BV
Posted by : Guest
You say you don`t trade that means you are an investor. This is not a stock to trade. This is an investment stock. However, if you are in the habit of watching its price on a daily basis, you might as well trade it.
Forget all about it for the next 6-8 months and you will find decent returns. I would recommend a longer term hold, its not a bad dividend payer and certaily has great potential.
If your investment horizon is shorter then wait till it reaches your target and sell out even if there are rumours of takeovers or great results.
When this stock goes over 250 there will be lots of recommendations and predictions that it will reach 285 or 300 or even higher.
My view is that it has a very good chance of touching 350 levels by the end of December and little downside upto 215 or so. At a price of 230 or thereabouts it is a damn good buy....
WHY TRADE BELOW BV
Posted by : mitseethank you...so the bottom line is it is a stock to trade and not invest which i did....thrice it had come till 260 but i dint sell expecting better q2 results which disaapointed....cant expect better q3 results...the worst part is nifty is back to 5000 and dow is set for correction...so wat to do ?? should i remain invested..coz i dont trade ????and wat about the deteriorating assets and high provisions ???pls reply.....
WHY TRADE BELOW BV
Posted by : mitseethank you...so the bottom line is it is a stock to trade and not invest which i did....thrice it had come till 260 but i dint sell expecting better q2 results which disaapointed....cant expect better q3 results...the worst part is nifty is back to 5000 and dow is set for correction...so wat to do ?? should i remain invested..coz i dont trade ????and wat about the deteriorating assets and high provisions ???pls reply.....
WHY TRADE BELOW BV
Posted by : Guest
Yes, this will go up. Remember this had touched a high of over 400 just before the rights issue.
Many shares quote at levels that cannot be justified. This is the fourth best private bank in terms of profits and sales (after ICICI HDFC and Axis). In terms of market capitalisation it comes in at 8th.
Investors should be patient and wait for their turn. The share price movement will be fantastic.
Till then keep trading the share, selling at higher levels and buying back at lower levels, without trying to catch the absolute top or absolute bottom....
WHY TRADE BELOW BV
Posted by : mitseebut will this ever go up...i have been holiding it for a long time and getting rattled now...is there any problem with the loan assets...or the reason is there is no promoter holding in it ??and wats the update on the merger...and a boarder had asked tat why did the rights issue take place so below the mp...?? ...
WHY TRADE BELOW BV
Posted by : smartakkaSome shares are quoted unneessarily more or less than what they deserve. It cannot be explained. Tata Motors has reported a better profits by selling TISCO shares and is quoted more than TISCO. One time concession by Govt will not continue long and Tata Motors profits are bound to suffer in time to come as over seas acuisiton is also bound to affect it . I am a holder in all these three shares and I am not able to under stand this. Again another banking share City Union was projected badly by Karvy that it will hit Rs 13 where as it is moving up and that is share market....
Citigroup maintaining buy
Posted by : Guestbut are the loan assets failure % worst in the industry and is tat the reason why the stock is valued worst among the banking stocks...i want to know the actual reason...if pls. someone could explain......
Great consolidation
Posted by : GuestFederal has consolidated beautifully and should soon see much higher levels if global situation holds out for a few more weeks. I expect levels of over 320 quite soon at this counter with the possibility of 350+ also if there is some support from global markets....
