NSE Symbol: FEDERALBNK | BSE Code: 500469
Federal Bank Limited is a significant Indian commercial bank in the private sector headquartered at Aluva, Kerala. The Bank serves in four segments, namely,
Other banking services.
Treasury operations cover trading and investment in shares, securities and debentures. The products and services of the Federal bank include working capital, term finance, foreign exchange, trade finance, specialized corporate finance products, structured finance, syndication services and electronic banking requirements. Federal Bank has 1,252 branches, 1,696 ATMs and 231 Cash Machines. The bank also has its own Representative Office at Abu Dhabi and Dubai and it has an IFSC Banking Unit (IBU) in the GIFT City. The Bank provides a variety of services such as net banking, mobile banking, online bill payment, depository services, online fee collection, insurance, Cash Management Services, merchant banking services,mutual fund products and many more as element of its strategy to place itself as a financial supermarket and to intensify the customer convenience.
Federal Bank: History and Trends
Federal Bank Ltd was consolidated on April 28, 1931, with the name, Travancore Federal Bank Ltd. The company was installed with an authorized capital of five thousand rupees at Nedumpuram, which is a place located near Thiruvalla in Central Travancore under the Travancore Company’s Act. K.P.Hormis established federal Bank. They commenced the business of auction-chitty and other banking transactions linked with industry and agriculture. In May 1945, the registered office of the Bank was shifted to Aluva. They started their first branch at Aluva and commenced services. In 1946, they started their second branch at Angamaly. In March 1947, the bank was renamed to Federal Bank Ltd. In April 1947, they began their third branch of the Bank was at Perumbavoor, Kerala. In July 1959, the Bank received its license under Sec. 22 of the Banking Companies Act, 1949. The Bank hovered through several series one after another. They also launched several new deposit schemes in the same period. In 1964, the Bank acquired all the liabilities and assets of the Chalakudy Public Bank Ltd, The Alleppey Bank Ltd. and The Cochin Union Bank Ltd
In 1965, the St.George Union Bank Ltd was merged with the Bank. In 1968, The Marthandam Commercial Bank Ltd was merged with the Bank. In 1970, the Bank turned into a Scheduled Commercial Bank.
In 1973, the Bank turned into an Authorized Dealer in Foreign Exchange and International Banking Department and also it started functioning from Mumbai.
In 1975, the Bank opened roughly 53 branches.
In 1976, they opened 42 branches.
In 1982, the Bank moved the International Banking Department to Cochin as a part of stabilization and centralization of the banking activities. As a part of the redesigning of the organization by the National Institute of Bank Management (NIBM), the Agricultural Finance Department had set up its head office in November 1984.
In July 1985, the Bank set up a Personnel and Industrial Relations Department. Additionally, they had established the first Advanced Ledger Posting Machine (ALPM-a Wipro banker) at the Br. Aluva-Bank Junction branch.
In 1987, they inaugurated the administrative building complex.
In 1989, the Bank enrolled in the Merchant Banking Operations.
In March 1994, the Bank came up with a public issue.
In 1997, the bank initiated their first ATM at Ernakulam North, Kerala.
In 2000, the Bank began their Anywhere Banking (ABB) in Bangalore uniting all the branches located in the Bangalore metro. They launched the Depository Services in connection with NSDL. Also, they began Internet Banking under the name FedNet with the software support from Infosys Technologies Ltd. They ventured into marketing agreements with some marketing agencies for their e-commerce business.
In 2001, the bank made a tie-up with Escotel Communications to propel mobile banking services through SMS. Additionally, they launched a new deposit scheme that was named as 'Suraksha' for senior citizens. The Federal bank became a member of the INFINET, which is the financial network supported by RBI.
In February 2002, they set up full-fledged operations for the RBIs Negotiated Dealing Systems (NDS) at the Funds & Investment Branch in Mumbai, facilitating online trading in securities for the bank.
In 2003, the Bank revealed the Anywhere Banking which granted the convenience of doing transactions from 300-plus interconnected branches for its customers.
In 2004, the Bank reached the level of 100% interconnectivity amongst all its branches. Plus, they started an Equity Subscription Scheme, which is a new retail product for financing the IPOs and public issue applications of their existing customers.
The Bank made an agreement with ICICI Prudential Life Insurance Company Ltd for premium acquisition through their branches and introduced a new scheme known as 'Fed e-Pay services.'
In 2005, JRG Securities Ltd formed an alliance with the Bank for giving loans for subscribing to the Initial Public Offerings (IPOs) in the share market. The bank rose as the first bank in India to offer Real Time Gross Settlement (RTGS) transversely in all its branches.
In September 2006, Ganesh Bank was merged with the Bank and the 32 branches of formerly known Ganesh Bank of Kurundwad Ltd were integrated to the bank's network.
In the year 2006-07, the Bank started into a joint venture arrangement with IDBI Ltd and Fortis Insurance International N V for consolidating a Life Insurance Company under the name of IDBI Fortis Life Insurance Company Ltd.
In the financial year 2007-08, the Federal Bank opened its Representative office at Abu Dhabi in UAE for the gateway of the bank to the entire Middle East and also as an interface for their existing customers of GCC countries and its offices in India.
In March 2008, the joint ventures of the company, IDBI Fortis Life Insurance Company Ltd started its operations. In the year 2009-10, the Bank opened 115 new ATM centers and 60 new branches
During the year 2010-11, Federal Bank opened 71 new branches and 73 new ATMs. In March 2011, the Bank had two A category branches and 78 branches indicated as B category for supervising the foreign exchange business.
Federal Bank opened 66 branches across the nation on the occasion of the bank's 66th Founders Day in October 2011.
In November 2011, the bank began its second 24x7 Customer Care Contact Centre guarded by differently abled people. In December 2011, Federal Bank confirmed Inward Remittance Agreement with Samba Bank, which is one of the largest banks in Saudi Arabia (KSA).
In January 2012, Federal Banks Islampur branch turned to be the first branch in the country to execute the ICT model Financial Inclusion product Fed Jyothi in Maharashtra.
In the same month, Federal Bank launched Fast Biz Visa International Business Debit Card to help the SMEs and Corporate Clients.
In March 2012, Federal Bank officially launched 100 branches in a single day throughout the country, bringing the total number of branches 935. In April 2012, Federal Bank began IMPS, which is the instant interbank fund transfer service through mobile phone or netbanking by which the amount is instantly credited to the beneficiary's account.
In August 2012, Federal Bank inaugurated its 1000th branch at Muthoor in Kerala.
In December 2012, the entire employee strength of the bank crossed 10,000.
In March 2013, Federal Bank's 3rd Currency Chest in Mumbai was inaugurated. In the same month, the bank's Money Exchange Bureau was inaugurated at Trivandrum International Airport. Federal Bank crossed 1 lakh crores of total business towards the end of the financial year 2012-13.
In May 2013, Federal Bank offered Value Added Services (Travel, Tax Advisory Service) to NRI customers through their website.
In June 2013, Federal Bank ventured into a tie-up with Tata Communications Payment Solutions Ltd (TCPSL) for serving as the sponsor bank for white-label ATMs which was to be disposed of by TCPSL. Federal Bank is the first financial institution in India to be a sponsor bank for White Label ATMs.
In August 2013, Federal Bank launched 'FedBook,' which is the first electronic passbook generated by a bank in India. FedBook is a phone app which can be used by customers to get their passbook details.
Federal Bank's total number of branches crossed 1,150 in February 2014. The bank managed to increase its footprint and added another 32 branches and 47 ATMs in the same quarter ending on 31 March 2014 to take the tally to 1,174 branches and 1,359 ATMs in the same year.
Federal Bank initiated its first International Standard 24 X 7 Banking facility started operating as the Federal Experience Center in November 2014 in Kochi.
In March 2015, Federal Bank collaborated with Startup Village in Kerala and MobME wireless to launch India's first focused FinTech Accelerator Programme, which was aimed at improving the financial sector technologically.
In May 2015, SBI and Federal Bank announced their collaboration to launch Federal Bank-SBI co-branded credit cards. In this alliance, Federal Bank propelled two brand-new variants of Visa credit cards for its customers, namely 'Platinum and Gold N More.'
In June 2015, Federal Bank began Scan N Pay, which is an innovative payment app for smartphones. The bank also started Mobile Recharge facility through its ATMs.
In August 2015, Federal Bank launched its first-ever digital loan Fed-E-Credit, which is an online loan against deposit facility. In the same month, the bank authorized Card-to-Card fund transfer facility through its ATMs and it also launched FedBook Selfie, which is a mobile-based savings banks (SB) account opening application which is first of its kind in India.
In October 2015, Federal Bank grew to become the first bank to launch the mobile ATM facility and Currency Conversion Desk at the Cochin Port, expediting passengers of cruise ships to exchange currency efficiently upon arrival. in the same month, the bank launched Missed call based banking services for Balance Enquiry and Mini Statement and Federal Bank also became the second bank in the entire country to open an International Financial Services Centre (IFSC) Banking Unit (IBU) in GIFT City.
Federal Bank started the Missed call based banking services for Mobile Recharge in December 2015.
In January 2016, the bank introduced Missed call based banking services for Fund transfer. In March 2016, Federal Bank launched the Payment Gateway facility for KSEB electricity Bill payment. In April 2016, Federal Bank got into a strategic partnership with Phillip Capital (India), which is a subsidiary of Phillip Capital group, for giving Portfolio Investment Scheme (PIS) assistance to NRIs.
In June 2016, Federal Bank launched the Launchpad, an exclusive outlet for start-ups. Launchpad is a one-stop facility that provides a range of advisory services and customized banking contributions to aspiring entrepreneurs.
In August 2016, Federal Bank began its Unified Payments Interface (UPI) application Lotza. This app is built based on the concept of Accounts of different Banks on one App, Lotza grants seamless and robust financial transaction capability between accounts of different Banks through a single app.
In November 2016, Federal Bank stated that RBI had permitted the bank to inaugurate a representative office in Bahrain and also to open a branch in Dubai, UAE. The Credit Committee & Investment and Capital Raising Committee of the bank at its conference held in June 2017, authorized the issue and allotment of issue of 21.55 crores worth equity shares to Qualified Institutional Buyers at the issue price of 116 rupees per share which aggregates to 2500 crores. The Qualified Institutional Placement (QIP) issue was settled on 27 June 2017.
On 8 November 2017, Federal Bank declared that the RBI has approved to the bank for opening representative offices at Kuwait and Singapore. After these offices, the bank will be able to broaden its services to the NRI diaspora and also improve the international visibility of the bank. The total business of the bank reached the 2 lakh crores in 4th Quarter of 2018. The bank also showed its highest operating profit of Rs 589 crore in Q4 March 2018.
In May 2018, Federal Bank informed the stock exchange market that the RBI had given its approval to the bank for acquiring up to 19.9% of the equity capital of Equirus Capital Private Limited (ECPL) against the approval of the Board of Directors of the bank for purchase of a significant stake of up to 26% of ECPL.
Federal Bank and Fedbank Financial Services Limited also known as Fedfina on July 2018, which is a wholly owned subsidiary of the bank, started a definitive agreement for Fedfina for issuing fresh equity shares, which were subject to regulatory and statutory approval, constituting 26% of the post-issue paid-up capital of Fedfina, to the fund that is managed by True North Enterprise Private Limited.
Federal Bank and Equirus Capital Private Limited ventured into definitive agreements for investment by the bank to 19.89% in the equity share capital of Equirus Capital Private Limited in June 2018.
The Federal Bank has been majorly involved in increasing their loan book growth as well as their asset liability mix in this financial year (FY 2018-19). In the first quarter of the Financial Year 2018-19, the companyâ€™s total advances grew by around 5%. However, it had announced a profit rate of meagre 0.9% in the second quarter, however, the interest earned rose to 16.2 percent to 27.65 billion rupees in the same quarter. Federal Bank is a company with a slow growth rate. So, if you are looking for a long-term investment which could give you average returns, then you must invest in federal bank shares.
The Federal Bank share price went through a roller-coaster ride for the financial year 2018-19. The highest point for the Federal Bank share was â‚¹115.05 per share on January 2018 and the lowest point for the Federal Bank share stood at â‚¹68.1 per share.