The covid-19 induced lockdown will crimp loan growth for Kerala-based Federal Bank Ltd. But a bigger problem for the lender is its deposit franchise, which is under attack since the collapse of Yes Bank Ltd.
In an update on its March quarter performance, Federal Bank said its deposits grew 13% year-on-year while loan growth was 11%.
Both the numbers are a far cry from the past one year as shown in the adjoining chart. India’s private sector banks have faced a double whammy this year with Yes Bank’s collapse and the lockdown to curb covid-19 outbreak.
These two events have come within months, and have seen an unsavoury reaction from depositors. Unlike RBL Bank Ltd and IndusInd Bank Ltd, which witnessed a sharp spike in deposit outflows,