Derivatives and Quantitative Strategist

Gaudenz Schneider

Event-Driven

<ul>
<li>The <a href="https://www.smartkarma.com/entities/nifty-index" target="_blank" data-smartkarma-citation="entities:23617:1" rel="noopener">NIFTY Index (NIFTY INDEX)</a> and the <a href="https://www.smartkarma.com/entities/nse-nifty-bank-index" target="_blank" data-smartkarma-citation="entities:26811:1" rel="noopener">NSE Nifty Bank Index (NSEBANK INDEX EQUITY)</a> reached all-time highs on 26 September 2024 but have since declined.</li>
<li>Most stocks in the Bank Index have fallen below their 200 and 50 day moving average,. Volatilities have gone up, but trade cheap when compared to historical levels.</li>
<li>Opportunities present themselves either in stocks that stayed resilient during the downturn (<a href="https://www.smartkarma.com/entities/federal-bank-ltd" target="_blank" data-smartkarma-citation="entities:11784:1" rel="noopener">Federal Bank (FB IN)),</a>or fell and gained in implied volatility. A long-short strategy might also be considered.</li>
</ul>


The NIFTY Index (NIFTY INDEX) and the NSE Nifty Bank Index (NSEBANK INDEX EQUITY) reached all-time highs on 26 September 2024 but have since declined.
Most stocks in the Bank Index have fallen below their 200 and 50 day moving average,. Volatilities have gone up, but trade cheap when compared to historical levels.
Opportunities present themselves either in stocks that stayed resilient during the downturn (Federal Bank (FB IN)),or fell and gained in implied volatility. A long-short strategy might also be considered.


EQD | Nifty Banks – Single Stock Options and Relative Value Opportunities

External broker reports(aggregated public sources), Axis Direct

Axis Direct

External broker reports(aggregated public sources)

Axis Direct is the flagship brand under Axis Securities Limited, a subsidiary of Axis Bank in India. 

Content available is external broker reports authored by a third party outside the Smartkarma network and has been aggregated by an online aggregator through publicly available sources and is displayed by Smartkarma in this format for user's convenience and general informational purposes only. Content does not constitute investment or financial advice and Smartkarma makes no representation or warranty regarding its accuracy or contents. Original third party author retains all copyright and other proprietary rights in the content. Access or use of third party links not controlled by Smartkarma are at the user's own risk.

Equity Bottom-Up

<ul><li>Re-looking into the Deposit Strategy: FB’s slow deposit growth in Q2FY25 was an outcome of slower TD growth, as the bank intentionally did not want to garner higher-cost deposits.</li><li>Hereon, FB will continue to focus on pursuing growth in CASA Deposits as it aspires to become a primary banker for its retail and corporate customers.</li><li>The focus will remain on acquiring both ETB and NTB CASA customers through improved branch productivity and the introduction of new products. </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Re-looking into the Deposit Strategy: FB’s slow deposit growth in Q2FY25 was an outcome of slower TD growth, as the bank intentionally did not want to garner higher-cost deposits.Hereon, FB will continue to focus on pursuing growth in CASA Deposits as it aspires to become a primary banker for its retail and corporate customers.The focus will remain on acquiring both ETB and NTB CASA customers through improved branch productivity and the introduction of new products. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Federal Bank Ltd - New Management Revisiting Strategy to Drive the Next Leg of Growth!

Thematic (Sector/Industry)

<ul><li>The systemic credit growth (as of 13th December, 2024) has tapered to ~11.5% vs 15-16% in the recent past.</li><li>This is primarily driven by a significant slowdown in the unsecured loans alongside banks, mainly private banks intending to bring down their LDRs to a balanced level.</li><li>Amidst concerns around asset quality in certain segments (majorly unsecured lending), weaker-than-expected macro data and constraints around LDR (for certain banks), banks have been cautious towards chasing aggressive growth. .</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

The systemic credit growth (as of 13th December, 2024) has tapered to ~11.5% vs 15-16% in the recent past.This is primarily driven by a significant slowdown in the unsecured loans alongside banks, mainly private banks intending to bring down their LDRs to a balanced level.Amidst concerns around asset quality in certain segments (majorly unsecured lending), weaker-than-expected macro data and constraints around LDR (for certain banks), banks have been cautious towards chasing aggressive growth. .Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Q3FY25 Earnings Preview - Banks, Financial Services and Insurance (BFSI)

External broker reports(aggregated public sources), HDFC Securities

HDFC Securities

HDFC securities is the best online trading platform for stocks, IPOs, mutual fund in India. 

Content available is external broker reports authored by a third party outside the Smartkarma network and has been aggregated by an online aggregator through publicly available sources and is displayed by Smartkarma in this format for user's convenience and general informational purposes only. Content does not constitute investment or financial advice and Smartkarma makes no representation or warranty regarding its accuracy or contents. Original third party author retains all copyright and other proprietary rights in the content. Access or use of third party links not controlled by Smartkarma are at the user's own risk.

<ul><li>We recently met Mr. Shyam Srinivasan, the outgoing CEO of Federal Bank (FB), to reflect on the bank’s evolution during his tenure and the key areas that need incremental attention for the bank to reset its ceiling</li><li>With its loan book at INR2.2trn and the deposit base at INR2.7trn, FB has broken through the mid-sized banks league and has steadily narrowed the gap with larger peers</li><li>FB has been focused on growing its mix of unsecured loans and building capabilities in the wealth management space, while simultaneously targeting better traction in its corporate book to drive productivity gains and stronger profitability.</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

We recently met Mr. Shyam Srinivasan, the outgoing CEO of Federal Bank (FB), to reflect on the bank’s evolution during his tenure and the key areas that need incremental attention for the bank to reset its ceilingWith its loan book at INR2.2trn and the deposit base at INR2.7trn, FB has broken through the mid-sized banks league and has steadily narrowed the gap with larger peersFB has been focused on growing its mix of unsecured loans and building capabilities in the wealth management space, while simultaneously targeting better traction in its corporate book to drive productivity gains and stronger profitability.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Federal Bank: A solid baseline offers opportunity to reset upper ceiling. Maintain BUY

<ul><li>FY24 was a year of delivering a strong performance across metrics, with Federal Bank (FB) (i) Strengthening the Deposit franchise thereby strengthening its market share with a marginal gain of 5bps in terms of deposits</li><li>(Continued robust credit growth with continued improvement in mix better yielding products</li><li>Robust fee income growth,(iv) Strong RoA delivery of 1.3% despite challenges on NIMs and Opex and (v) Maintaining Asset Quality driven by controlled slippages and healthy recoveries.</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

FY24 was a year of delivering a strong performance across metrics, with Federal Bank (FB) (i) Strengthening the Deposit franchise thereby strengthening its market share with a marginal gain of 5bps in terms of deposits(Continued robust credit growth with continued improvement in mix better yielding productsRobust fee income growth,(iv) Strong RoA delivery of 1.3% despite challenges on NIMs and Opex and (v) Maintaining Asset Quality driven by controlled slippages and healthy recoveries.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Federal Bank Ltd. - Going From Strength to Strength!

India

Federal Bank Limited operates branches and regional offices throughout India. The Bank offers a wide range of financial services, including merchant banking, international banking and foreign exchange, leasing facilities, money markets and agricultural advances. The Bank also provides lending for hi-tech agricultural and government sponsored schemes.

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Federal Bank (FB IN)

EQD | Nifty Banks – Single Stock Options and Relative Value Opportunities

The NSE Nifty Bank Index hit a record high in September 2024 but has since dropped. Option opportunities are found in resilient or volatile bank...

Gaudenz Schneider

Federal Bank Ltd - New Management Revisiting Strategy to Drive the Next Leg of Growth!

Re-looking into the Deposit Strategy: FB’s slow deposit growth in Q2FY25 was an outcome of slower TD growth, as the bank intentionally did not want...

Axis Direct

Q3FY25 Earnings Preview - Banks, Financial Services and Insurance (BFSI)

We expect banks under our coverage to deliver ~12% YoY credit growth in Q3FY25, in-line with industry growth. We would expect the systemic growth...

Axis Direct

Federal Bank: A solid baseline offers opportunity to reset upper ceiling. Maintain BUY

With its loan book at INR2.2trn and the deposit base at INR2.7trn, FB has broken through the mid-sized banks league and has steadily narrowed the...

HDFC Securities

Federal Bank Ltd. - Going From Strength to Strength!

Robust fee income growth,(iv) Strong RoA delivery of 1.3% despite challenges on NIMs and Opex and (v) Maintaining Asset Quality driven by...

Axis Direct

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