Federal Bank stock up 9% ;denies merger talks

The news report of a merger between Federal Bank and another private bank is speculative in nature, the bank said
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federal bank stock price

Shares of Federal Bank NSE 3.35% increased more than 8% on Monday after the private sector lender refuted a media report that said it was in merger talks with Kotak Mahindra Bank NSE 0.99%

At 11.50 am, the stock was trading 3.39 percent higher than the previous day’s closing price of Rs 119.45 per share, at Rs 123.50. The stock has increased by over 50% during the last 12 months, and it has increased by roughly 42% so far in 2022.

Federal Bank’s interest income for the June quarter increased 8.14% year over year (YoY) to Rs 3,628.86 crore from Rs 3,355.71 crore in the same quarter last year. For the most recent quarter, the company generated a net profit of Rs 600.66 crore. Net interest income (NII) was Rs 1,605 crore versus Rs 1,418 crore year over year.

On its part, Federal Bank has denied the news report saying it is speculative in nature.

Federal Bank stated in an exchange filing on clarification of news item circulating in media: “We wish to unequivocally state that the news story of a merger between Federal Bank and another private bank is of a speculative nature.”

In this regard, we would like to clarify that no information is currently available with the Company that is required to be notified in accordance with the current SEBI Regulations and that could affect the stock price of the Company, according to Federal Bank.

The stock price of Federal Bank has increased by 44% over the previous three months as a result of the bank reporting outstanding operational performance during the June quarter (Q1FY23). The S&P BSE Sensex, in contrast, has increased by 6% over the same time period.

The management’s confidence in driving growth of 16–18% is still optimistic. Earnings are aided by the bank’s strong business traction and varied customer base. Partnerships in digital and fintech will help the deposit franchise develop. In their result update, analysts at ICICI Securities stated that they were focusing on high yield products (CV/CE, micro, and personal loans) to help margins.

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