India's Federal Bank falls after Morgan Stanley cuts to 'underweight'

Federal Bank

04/09/2024 06:28

** Shares of Federal Bank  FED.NS  fall 2.5% to 190 rupees 
    ** Morgan Stanley downgrades bank to "underweight" from
"equal weight" citing lower credit costs and changes in rate
cycle
    ** Net interest margins may stay low due to low-yield loans
and stable retail deposits- MS
    ** Flags, potential impact on earnings, growth from new
liquidity coverage ratio (LCR) and expected credit loss (ECL)
norms implemented by central bank
    ** Adds, NIM would remain a challenge amid tight deposit
growth and high competition for the sector as a whole
    ** Avg rating of analysts covering the stock at "buy";
median PT is at 230 rupees - LSEG data
    ** Stock up ~22% YTD vs a ~3% rise in Nifty private bank
index  .NIFPVTBNK 


 (Reporting by Yagnoseni Das in Bengaluru)
 ((Yagnoseni.Das@thomsonreuters.com;))